Australia: Are you involved in the road transport industry? If so, you need to know about the new Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014

New legal requirements imposed by the Road Safety Remuneration Tribunal will significantly affect many transport operators from 1 May 2014. The Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 imposes a number of new legal obligations on road transport operators, including a requirement that there be a written contract with each driver, and a 'safe driving plan' for each long-distance journey using a heavy vehicle. There are heavy fines for employers, hirers and other participants in the supply chain who breach the Order.

What is the Road Safety Remuneration Act and Tribunal?

The Road Safety Remuneration Act 2012 (Cth) (Act) commenced on 1 July 2012 and was enacted to regulate remuneration and remuneration based incentives throughout the road transport industry supply chain (industry).

The Act establishes the Road Safety Remuneration Tribunal (Tribunal) and provides it with powers to make Road Safety Remuneration Orders (RSR Orders) that impose legal requirements on the industry.

Who can be the subject of a RSR Order and what conduct can it regulate?

The Tribunal can make RSR Orders in relation to the remuneration and associated conditions for road transport drivers. A RSR Order may impose requirements on:

  • an employer of a road transport driver (employer);
  • a hirer who engages the services of a road transport driver through a contract (hirer); and
  • other entities that are 'participants in the supply chain'.

For the purposes of the Act, a 'road transport driver' can be an individual or a company. An individual road transport driver is a driver who is an employee or an independent contractor. A corporate road transport driver is a corporation whose vehicles are mainly driven by either a director of the corporation or a director's family member. This would include many family owned road transport businesses.

An entity is a 'participant in the supply chain' if it is a consignee, a consignor, an intermediary or an operator of premises that regularly loads and unloads vehicles.

What is the 2014 Order and will it affect you?

The Tribunal made the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 (2014 Order) on 17 December 2013.

The 2014 Order commences on 1 May 2014 and will operate until 30 April 2018. It will have a significant effect on entities that can be the subject of a RSR Order and are involved in:

  • the transport of retail goods destined for sale or hire by a supermarket chain;
  • an interstate journey exceeding 200 km; or
  • a return journey exceeding 500 km.

If the 2014 Order applies to your business, what will you have to do?

The 2014 Order imposes a significant number of new legal obligations, including the following:

  • An employer or hirer must provide all employee and contractor drivers (including ad hoc contractor drivers) with a written contract covering their engagement that contains prescribed particulars and includes a mechanism for at least annual review of rates of payment. This contract can be in electronic form.
  • A participant in the supply chain must take reasonable steps to ensure that any contract a driver has with another participant in the supply chain is consistent with the 2014 Order.
  • A hirer must pay contractors within 30 days from receipt of a contractor's tax invoice.
  • An employer or hirer must prepare an extensive safe driving plan for each load of goods for all long-distance travel employees and contractors using a motor vehicle with a gross vehicle mass of more than 4.5 tonnes (in addition to the current work diary).
  • The safe driving plan must be prepared and reviewed in consultation with the relevant employee or contractor.
  • A hirer must not make deductions from any amounts due to a contractor except in specified circumstances.
  • An employer or hirer must implement a drug and alcohol policy including mandatory drug and alcohol testing in accordance with the relevant Australian standards. Employee and contractor drivers must, as far as practical, be consulted about and trained in relation to the policy.
  • An employer or hirer must take all reasonable measures to ensure employee and contractor drivers are trained in work health and safety systems and procedures relevant to the road transport service.
  • An employer or hirer must keep a copy of all employment contracts made with a road transport driver for seven years after the contract ends.

Does the 2014 Order regulate how much you must pay drivers or contractors?

The draft 2014 Order orginally required hirers to pay contractors a 'reasonable amount' for any work. 'Work' was defined as including waiting time, re-fuelling time and time taken recording information. The Tribunal has removed references to the amount that contractors must be paid but has indicated that the 2014 Order is likely to be varied to include minimum payment provisions. The President of the Tribunal has indicated that a conference of 'interested parties' will be convened in the near future on the issue of rates of pay for employee and contractor drivers.

What are the consequences if you breach the 2014 Order?

Any breach of the 2014 Order may result in:

  • a fine of up to $10,200 per individual or $51,000 per company;
  • an order for compensation to be paid to an affected party; or
  • an injunction to prevent further contravention of the 2014 Order.

Should you do anything?

If you are affected by the 2014 Order, you need to take steps to ensure that you comply with its requirements by 1 May 2014.

The application of the 2014 Order is complex and we recommend you obtain legal advice as to how the 2014 Order will affect your business operations.

Cooper Grace Ward can assist you in complying with your obligations under the 2014 Order including:

  • determining whether and to what extent the 2014 Order applies to your business;
  • preparing subcontracting agreements;
  • advising on the content of safe driving plans; and
  • preparing drug and alcohol policies and other workplace policies.

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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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