Australia: Will you be caught by the widening of responsibility for "safety and fairness" and remuneration in the road transport industry???

Commercial/Employment Law Update
Last Updated: 22 February 2012
Article by Martin Dunne, Andrew Hudson and David Thompson

In November 2011 the Road Safety Remuneration Bill ("RSRB") was introduced into Federal Parliament, aimed at "promoting safety and fairness in the road transport industry".

The RSRB has been referred to a Senate Committee for review with a proposed commencement date of 1 July 2012.


The RSRB creates the Road Safety Remuneration Tribunal ("Tribunal") which can make road safety remuneration orders, safe remuneration approvals and arbitration orders which are "enforceable instruments" that will prevail over State or Territory laws, modern awards, enterprise agreements, Fair Work Australia orders or transitional instruments.

Enforceable instruments will widen compliance requirements on all participants in the road transport industry sup¬ply chain (the Supply Chain), including consignees and consignors (such as supermarkets and head contractors) who previously had limited if any enforceable obligations to participants "lower" in the Supply Chain. The Tribunal will also deal with disputes relating to road transport drivers, their employers, hirers and other participants in the supply chain.

Therefore the RSRB has potential consequences for commercial contracts in the road transport industry extending beyond the obligations currently existing in the employment relationship.

The RSRB will create a Federal system similar to that operating in NSW under Chapter 6 of the Industrial Relations Act, which provides protection to contract carriers (commonly referred to as owner drivers) who, although corporations, are afforded entitlements comparable to employees.

The stated objectives of the RSRB include:

  • to remove remuneration-related/economic incentives, pressures and practices to work in an unsafe manner or that contribute to unsafe work practices;
  • ensuring road transport drivers are paid for work including loading, unloading or waiting for vehicles to be loaded or unloaded;
  • developing and applying reasonable and enforceable standards throughout the Supply Chain to ensure safety of road transport workers;
  • ensuring that hirers and participants in the supply chain take responsibility for implementing and maintaining standards;
  • providing access to dispute resolution procedures relating to remuneration and related conditions for road transport drivers.


  1. Road Safety Remuneration Tribunal ("the Tribunal")

The Road Safety Remuneration Tribunal will have functions including:

  1. making road safety remuneration orders (see below);
  2. granting safe remuneration approvals in relation to road transport collective agreements (see below);
  3. dealing with disputes relating to road transport drivers, employers, hirers and other participants in the supply chain; and
  4. research into remuneration-related matters that affect safety in the road transport industry.
  5. preparing an annual work program identifying matters for enquiry with a view to making road safety remuneration orders in relation to issues or practices affecting the road transport industry.
  1. Road safety remuneration order (RSRO).

The Tribunal can make road safety remuneration orders either in relation to matters identified in the work program or on application by a road transport driver; employer or hirer of a road transport driver; other participants in the supply chain and relevant registered employee associations and industrial associations.

Contravention of a RSRO carries a civil penalty of up to $6,600.00 for an individual and $33,000.00 for a corporation.

RSROs, without limitation, may deal with:

  1. conditions of minimum remuneration and other entitlements for drivers (in addition to modern award entitlements) and independent contractors;
  2. conditions for loading and unloading vehicles, waiting times, working hours, load limits, payment methods and payment periods;
  3. reducing or removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices; and
  4. impose relevant requirements on employers, hirers and other participants in the supply chain. When making a RSRO, the Tribunal must consider:
  5. fair, reasonable, enforceable standards to ensure safety and fair treatment of road transport drivers;
  6. the likely impact of any order on the viability of businesses, the national economy and movement of freight across the nation;
  7. special circumstances of areas that are particularly reliant on the road transport industry such as rural, regional and other isolated areas;
  8. orders and determinations made by the minimum wage panel of Fair Work Australia and relevant modern awards;
  9. the need to avoid the unnecessary overlap of the Fair Work Act (and other laws); to reduce complexity and for orders to be simple and easy to understand and to minimise compliance burden in the road transport industry;

Although affected persons will have a reasonable opportunity to comment and make submissions, the Tribunal is not required to hold a hearing before making a RSRO.

  1. Independent contractor collective agreements - safe remuneration approval.

The Tribunal may grant safe remuneration approval (Approval) for a road transport collective agreement between independent contractors and the participating hirer about remuneration and related conditions (an Agreement).

Once granted, an Approval requires the participating hirer must provide remuneration or related conditions that are no less beneficial than the specified in the Approval. A RSRO in effect at the time Approval is granted has no effect to road transport drivers covered by the agreement.

However a RSRO that takes effect after an Approval is granted will apply to an Agreement to the extent that the remuneration or related conditions specified in the Approval are less beneficial than a term of the RSRO.

The Tribunal must be satisfied before granting an Approval that:

  1. a road safety remuneration order that applies to participating drivers is in effect;
  2. the majority of participating drivers would be better off overall if the agreement applied and have approved the agreement; and
  3. if the agreement is to last for more than 1 year, that it contains an appropriate method for adjusting remuneration during the period of the agreement.
  1. Disputes.

Providing the dispute is about remuneration or related conditions that could affect whether the driver works in an unsafe manner, the Tribunal may deal with disputes between an independent contractor and hirers, former hirers and disputes about practices of other participants in the supply chain by:

  1. mediation or conciliation;
  2. making a recommendation or expressing an opinion;
  3. arbitration, (if the parties to the dispute agree).
  1. General
  1. The Road Safety Remuneration Act (the Act) will rely on constitutional powers with respect to corporations, trade and commerce and regulation of entities of the Commonwealth, Commonwealth authorities and territories.
  2. Union right of entry under section 481(1) of the Fair Work Act is extended to a suspected contravention of the Act or enforceable instrument.
  3. This Act will be a workplace law for the purposes of the Fair Work Act and in particular Section 341. As a result, the general protections division of the Fair Work Act will apply to the Act.
  4. The Fair Work Ombudsman will:
    1. monitor compliance with the Act and enforcement instruments;
    2. investigate any act or practice contrary to the Act or enforceable instrument;
    3. commence proceedings enforce the Act or enforceable instruments or refer matters to relevant authorities;
    4. represent road transport drivers who become a party to proceedings.
  5. The Federal Magistrates Court and Federal Court will have jurisdiction for matters as defined in the Act.
  1. Further Developments and Need to Monitor

Clearly, the RSRB has the potential to significantly impact on the operations of those in the transport industry. Those impacts can be imposed on transport operators through directed increases in amounts paid to drivers or changes to the conditions of drivers, whether those drivers are employees or contractors.

The Senate Committee has already had submissions from industry groups representing transport operators objecting to the RSRB as merely being another mechanism for Government to dictate wage increases.

We will keep you informed of developments but we would urge you to also monitor the progress of the RSRB. If you have concerns, we would also recommend submissions to the Senate Committee Inquiry or directly to the Federal Government

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Martin Dunne
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