Australia: New Road Safety Remuneration Legislation in 2012

This month, the government received resounding Senate support for the Road Safety Remuneration Bill 2012 ('the Bill'). The Bill passed the Lower House on 19 March. A major amendment was made to the Bill outlining that the new Road Safety Remuneration Tribunal (the Tribunal) established to hear disputes and set wages will not commence operations until 1 January 2013.

The passage of the Bill met some opposition, where debate became slightly heated in the Senate, however the Greens and Independent Nick Xenophon gave the numbers for passage of the Bill. The Road Safety Remuneration Act 2012 (Cth) will commence operation on 1 July 2012. It will regulate the road transport industry by setting remuneration and safety standards, with the ultimate goal being safer roads for all road-users.

History

The passing of the Bill will see the culmination of reform four years in the making. An investigation into driver remuneration and payment methods in the transport industry was initiated in July 2008 by the National Transport Commission. The report, handed down in October 2008, found a link between driver remuneration and safety outcomes in the Heavy Vehicle Industry. It was agreed by both the road transport industry and unions that reforms were needed, whilst broad consensus was held that pay levels were a very distinct part of solving safety concerns.

Key recommendations were made in the report, underpinned by a policy belief that the government needed to recognise safe payments for truck drivers as being inherently linked to transport law, workplace relations law and independent contractors / small business law. Regulatory intervention was recommended.

Transport Industry Statistics

The Australian trucking industry had a fatality rate of 25 deaths per 100,000 workers in the 2008-09 financial year.

It is the highest fatality rate of any Australian industry, at 10 times higher than the average for all industries.

It is believed this rate of fatality costs the Australian economy an estimated $2.7 billion annually.

Road Safety Remuneration Bill 2012

The Bill is the government's response to the recommendations outlined in the report. There is a noted connection between long work hours and low wages, with some owner-drivers unable to recover the cost of operating their own vehicle. The Bill seeks to improve conditions for drivers and ownerdrivers. Higher standards of accountability by large employers is also a strong driving force.

It's aims are clear: improved safety standards, thus regulating remunerationincentives to ensure they are balanced with safe working environments for drivers and all road-users. The role of creating a dispute resolution procedure (a function of the Tribunal) is also a key reform. The Bill will apply to individuals and corporations alike.

The Tribunal

The establishment of the Tribunal is seen as a key facet in delivering the desired outcomes of the Bill and will have certain specific powers in its operation. The Tribunal will make road safety remuneration orders, grant safe remuneration approvals relative to road transport collective agreements, resolve certain disputes and research remuneration matters and their effects to road and transport industry safety. Other functions of the Tribunal may be prescribed by regulations or other Commonwealth laws.

It is also intended to be less judicial and legislative in nature, while being more accommodating to all stakeholders, big and small. Appeals will be heard by a Full Bench of the Tribunal and legal representation is not generally permitted, however leave may be granted, though matters of law may be referred to the Federal court.

There will be a clear link with Fair Work Australia (FWA), as the President of the Tribunal must also be a Deputy President of FWA.

Appointment to the Tribunal Bench will be made up of the President, industry members and dual FWA members.

A Full Bench will consist of three or five members (with equal representation of industry and dual FWA members).

Tribunal commencement – 1 January 2013

It is intended that the Tribunal will not commence until 1 January 2013, however, if exceptional circumstances arise in the second half of 2012, a Tribunal will be set up to hear the matter. The intention of the delayed introduction is to give the Tribunal time to formulate work programs and make road safety remuneration orders before the dispute resolution function comes into force. It also acts as a 'transitioning period' for the industry stakeholders to become familiar with the new regulatory framework.

Collective agreement under the Bill

The Bill provides that a code of conduct in relation to collective bargaining for transport collective agreements may be introduced. Furthermore, there is the potential that if a collective agreement is not an approved agreement, it has no effect. Section 33(6) reads:

This has raised concerns that current agreements in operation, not made under existing state-based regulatory schemes, may be null and void. To what extent will be a question to be determined and we suspect may give rise to more legal based disputes than was intended.

Reaction

The Transport Workers Union strongly backed the Bill, lobbying support with various federal MP's. Their campaign was based on four key platforms of minimum rates of pay and full cost recovery for drivers, payment for waiting times while including flexible delivery times, rates that compensate drivers for fuel and maintenance, and holding clients accountable.

The passing of the Bill was met with resounding praise by the TWU, stating that their campaign for improved conditions had been on-going for nearly 20 years.

They expressed approval on behalf of not just members of the transport industry, but for their families and road-users in general.

Other stakeholders' reactions have been less positive and have included assertions that the Union will have greater bargaining rights, while the legislation will not improve safety. There is also a perceived view that liability under the legislation will attach to entities that do not actually employ drivers and will be accountable. Whether or not the introduction of the legislation proves effective in improving road safety, only time will tell.

However, if all parties can act cooperatively and work within the statutory scheme, there is some hope of improved remuneration, efficiency and safety for all industry stakeholders.

Conclusion

As with any new regulatory reform, assessment of the new legislation and current workplace standards, and in this case pay-rates, should be considered. Two key areas of the new legislation will require close monitoring in the immediate and distant future. Firstly, the impact of amendments outlining changes to collective agreements in the short-term would arguably see some upheaval within the industry. Secondly, the role to be played by the Tribunal, both in its later implementation and outcomes regarding wage-rates and disputes, will inevitably reform the behaviour of employers and employees, as well as contractors and principals.

It will be incumbent upon businesses to be ready for the reforms that will begin in only a few short months.

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