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Driving Change: The Road Safety Remuneration Act

Feature Articles

Cite as: September 2012 86 (09) LIJ, p.44.

Federal legislation linking road safety and payment of drivers in the road transport industry has implications all along the supply chain.

By Emma Goodwin and Bianca Friedman

Following extensive review of safety issues in the road transport industry,1 the federal government has passed controversial new industry-specific legislation2 to regulate work practices in the industry. The Road Safety Remuneration Act 2012 (Cth) (RSR Act), scheduled to commence on 1 July 2012, is designed to address the “unacceptably high” number of truck accidents and deaths3 and promote “safety and fairness”4 in the industry. Aims include ensuring there are no remuneration-related incentives compromising safety; that all participants in the supply chain take responsibility in this regard; and that industry participants have access to dispute resolution procedures relating to remuneration and related conditions for road transport drivers (s3).5 This article examines the key features of the legislation and the implications for the industry.

Application of the RSR Act

The Act applies to persons in the road transport industry, encompassing road transport and distribution; long distance operations in private transport; cash in transit and waste management industries,6 as well as other areas prescribed in regulations (s4). (Regulations are not yet available.)

The following people in the industry fall within the scope of the RSR Act:

  • “road transport drivers”, including employees or contractors of entities with a requisite constitutional connection (s6) and certain constitutional corporations where:
    • the corporation transports things by road, using one or more vehicles supplied by the corporation or a related individual (s7(3)); and
    • the vehicle(s) is/are mainly driven by a related individual whose main occupation is driving the vehicle(s) (s7);
  • “hirers”, being parties to written and/or oral contracts for services (including a condition or collateral arrangement) who engage contractor drivers to provide road transport services (s8); and
  • “participants in the supply chain” (industry participants), provided they have the requisite constitutional connection, including:
    • consignors or consignees of things in respect of which a driver is providing services;
    • intermediaries, being parties to a contract for carriage of goods under which a driver is providing services; and
    • operators of premises for loading and unloading (such as animal feed lots, distribution centres or ports),7 where an average of at least five vehicles are loaded or unloaded on each day the premises are used for that purpose (s9).

Relationship with other laws

The RSR Act will co-exist with existing legislation regulating independent contractors, including for example the Owner Drivers and Forestry Contractors Act 2005 (Vic) (s10). However, to the extent of inconsistency, more beneficial instruments made under the RSR Act (for example, Road Safety Remuneration Orders (RSROs); approved Road Transport Collective Agreements (RTCAs); or an arbitration order) will prevail over state or territory laws, Fair Work Act 2009 (Cth) (FW Act) instruments and common law contract terms (ss11–13 inclusive). This will be of particular importance for employers of drivers, as an RSR Act instrument may affect the way applicable FW Act or former Workplace Relations Act 1996 (Cth) instruments operate.

The RSR Act is a workplace law for the purposes of the workplace rights provisions of the FW Act (s118).

Administration and enforcement

The Road Safety Remuneration Tribunal (RSRT)

The newly established RSRT will be constituted by:

  • a President (who must also be a Deputy President of Fair Work Australia (FWA) (s97(2)). The first President will be Senior Deputy President Acton;8
  • two to four persons experienced in workplace relations matters, who must also be Deputy Presidents or Commissioners of Fair Work Australia (FWA) (s97(3)). Initial appointees are Senior Deputy President Drake, Commissioner Hampton and Commissioner Asbury;9 and
  • two to four part-time members experienced in one or more of transport and logistics, driving in the road transport industry, business, industry or commerce, and/or work health and safety in the industry (ss79, 98 and 99). Four (Professor Anne Williamson, Steve Hutchins, Tim Squires and Paul Ryan) have been appointed to date.10

Members are appointed for a term of five years (s97(1)), although appointments may end earlier in certain circumstances (ss102–106 inclusive and s109). Acting members may be appointed (s110).

RSRT administration will generally be handled by the General Manager of FWA (s112).

The RSRT will:

  • make RSROs, approve RTCAs and deal with disputes under the RSR Act. These functions are covered in greater detail below;
  • conduct research into remuneration-related matters that may affect safety in the industry; and
  • undertake other functions prescribed by regulations or in another federal law (s80) (none as yet).

Each year, the RSRT must, in consultation with the road transport industry, prepare and publish a work program. The work program must, among other things, identify the matters the Tribunal intends to inquire into, which may result in relevant RSROs being made, and deal with “any or all” of the issues and practices affecting the industry or a sector of it (s18).

The RSRT may make its own rules (s13), has a wide range of powers and is not bound to act formally or by the rules of evidence (ss85 and 86). It may conduct compulsory conferences or hearings (ss87 and 88); and, on its own initiative or on application, dismiss applications if they are not made in accordance with the RSR Act, are frivolous or vexatious, or have no reasonable prospects of success (s84). Generally, representation by lawyers and paid agents will only be permitted by consent of the RSRT (s91).

Certain RSRT decisions may be appealed with approval of an RSRT Full Bench (RSRTFB) (for example, failure to approve an RTCA) (s92). Questions of law may be referred to the Federal Court (s95). Consequential amendments to the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) exclude decisions under the RSR Act from operation of the ADJR Act.11

Compliance and enforcement

The Fair Work Ombudsman (FWO) is empowered to:

  • monitor compliance with the RSR Act, including by providing education and advice;
  • investigate non-compliance with the RSR Act or an RSR Act instrument;
  • commence proceedings under the RSR Act;
  • refer matters to relevant authorities; and
  • represent drivers who are, or may become, party to proceedings in a court under the RSR Act, if such representation will promote compliance (s73).

FWO inspectors may exercise FW Act compliance powers to determine compliance with the RSR Act or an RSR Act instrument (ss 74 and 75) and issue compliance notices in relation to failure to comply with an RSR Act instrument (s76(1)). In some cases, a person who receives a notice may apply to a court for review (s77).

In addition, unions have a right of entry identical to that under s481 of the FW Act, to investigate suspected non-compliance with the RSR Act or an RSR Act instrument (s78).

Regulation of drivers’ remuneration

RSROs

On its own initiative or on application of an industry participant (or, in some cases, an industrial association representing an industry participant) (s19), the RSRTFB may make an RSRO that imposes requirements on employers, hirers and/or industry participants (ss27(3) and 30), in relation to:

  • conditions about minimum remuneration and other entitlements for drivers (both employees and contractors);
  • conditions about industry practices (such as loading and unloading vehicles, waiting times, hours of work, load limits and payment methods and periods); and
  • ways of reducing or removing remuneration-related incentives, pressures and practices that contribute to unsafe work practices (for example, speeding and working excessive hours)12 (s 27(2)).

When making an RSRO, the RSRT must consider various relevant factors:

  • likely impacts of the order on the viability of businesses in the industry and the national economy;
  • the need to avoid unnecessary overlap with the FW Act and any other laws prescribed in regulations; and
  • the need to minimise the compliance burden on the industry (s20).

The RSRT must initially publish and consult on a draft of the RSRO (ss22 and 23) and give affected persons or bodies a reasonable opportunity to make written submissions (s24). It may hold a hearing in relation to the draft of the RSRO (s25) and will then choose whether or not to make the RSRO (including making any amendments to the draft it thinks appropriate) (s26).

An RSRO may operate for up to four years (s27(6)) and, during its life, be varied by the RSRT on its own initiative or on application by an industry participant (or, in some cases, their representative) (s32). In making a decision as to whether to vary an RSRO, the RSRT must consider the relevant factors and adhere to the submission requirement described above (s32). In the 12 months prior to the RSRO expiring, the RSRT must choose whether or not to replace the RSRO with another RSRO on the same or different terms (s31). In making its decision, the RSRT must again adhere to the submission requirement (s31(3)).

RTCAs

The RSRT (constituted by a member who is also a FWA member, or as an RSRTFB, (s39)) may approve an RTCA (s32A), which may operate for up to four years (s35(2)(e)). An RTCA is an agreement, made under the RSR Act, prescribing remuneration and/or related conditions for a group of contractor drivers and the hirer (or potential hirer) who proposes to hire the drivers for the provision of specified road transport services (the “applicable services”) (s33).

An RTCA may only be made where the RSRT is satisfied that:

  • an RSRO applicable to the relevant drivers is already in place (s34(a)). This is designed to ensure that “the rigorous process of making the RSRO is not dispensed with . . . [and a] RTCA will . . . not undercut an RSRO”;13
  • a majority of the relevant drivers would be better off overall under the RTCA than under the RSRO (s34(a));
  • the RTCA has been approved by a majority of the relevant drivers (s34(c));
  • the relevant drivers and hirer have conducted themselves in accordance with any prescribed code of conduct (s34(ca) and see also s33(3)-(5) inclusive). A code is not yet available; and
  • if the RTCA will run for more than one year, there is an appropriate method for adjusting remuneration (s34(d)).

These criteria are not exhaustive. The RSRT may consider any other factors it considers relevant, for example whether the group of participating drivers has been fairly chosen14 or the benefit of approving the RTCA would outweigh the detriment to the public caused by any potential lessening of competition if the RSRT approved the RTCA (s32A).

When approving an RTCA, the RSRT must make a written statement, to be provided to the relevant drivers and hirer and published on the RSRT’s website (s35(3)), specifying:

  • that the RSRT is satisfied the RTCA is adequate to ensure that contractor drivers do not have remuneration-related incentives to work in an unsafe manner;
  • the identity of the relevant hirer;
  • the remuneration (including method for adjusting it during the life of the RTCA) and any related conditions;
  • the applicable services;
  • that the hirer is required to provide at least the specified remuneration and conditions to any contractor driver who provides the applicable services to the hirer; and
  • the RTCA’s expiry date (ss35(1), (2)).

Once an RTCA is in force and prior to its expiry (s38), the RTCA prevails over pre-existing RSROs (s37(1)). It will also prevail over any subsequent RSRO, but only where the terms of the RSRO are inferior (s37(2)). The relevant hirer must apply the remuneration and other conditions in the RTCA to all contractor drivers who provide the applicable services to the hirer, whether or not the drivers were involved in developing the RTCA (s36). The RSR Act authorises certain conduct in relation to RTCAs for the purposes of the Competition and Consumer Act 2010 (Cth) (s37A).

Dispute resolution

From 1 January 2013,15 the RSRT may deal with disputes between:

  • an employee or contractor driver and the employer or hirer, as to:
  • remuneration or related conditions that could affect whether the driver works in an unsafe manner; and
  • dismissal/termination, where the driver alleges the dismissal was mainly because the driver refused to work in an unsafe manner; such a claim is to be made within 14 days (employees) or 28 days (contractors) after the dismissal/termination, or such longer period permitted by the RSRT (ss 40–42 inclusive). A dismissed employee driver must choose between making an RSR Act claim and a FW Act claim (s41(3)); or
  • industry participants, if:
  • an employer/hirer contends that the practices of an industry participant affect the employer/hirer’s ability to provide remuneration or related conditions to the driver that do not provide incentives to work in an unsafe manner; and
  • the relevant driver and employer/hirer have made an application to the RSRT under s40 (s43).

The RSRT may deal with disputes by mediation, conciliation, making recommendations or expressing opinions or (where the parties agree) by arbitration (s44(1)). Disputes about safe remuneration must be handled by an RSRT member who is also a FWA member (s45). If arbitration occurs, the RSRT may make any order it believes appropriate to ensure the driver does not have remuneration-related incentives to work in an unsafe manner (s44(2)). Such an order may impose requirements on a party to the dispute and/or on an industry participant who is not party to the dispute but who has agreed to be bound by the outcome of the arbitration (s44(3)). Arbitration orders must be complied with (s44(4)).

Breaches of the RSR Act

Failure to comply with an RSRO, RTCA, arbitration order or costs order attracts a penalty of up to 60 penalty units for an individual (currently $6,600) and 300 penalty units for a body corporate (currently $33,000) (ss28, 36, 44(4), 46 and 115(3)). Penalties of up to 30 penalty units (currently $3300) for an individual or 150 penalty units (currently $16,500) for a body corporate apply for a failure to comply with a compliance notice or for failing to keep prescribed records for at least seven years (ss46, 76(6), 119(1) and 119(2)).

A six-year limit applies for civil penalty and underpayment claims (ss47–49 inclusive). Civil penalty applications can be dealt with by the Federal Court, Federal Magistrates Court (FMC) or an eligible state or territory court (s50(1)). In addition:

  • the Federal Court and FMC may order an injunction or interim injunction, compensation, or any other order they consider appropriate (s49(1));
  • an eligible state or territory court may, if satisfied that another person is required to pay an amount under the RSR Act or an enforceable instrument, order the amount be paid (s49(2)).

Interest may be awarded (s51). However, costs are only available where a person has made or responded to an application vexatiously or without reasonable cause, or in a situation where the application or response had no reasonable prospect of success (s115). Various offences (such as failure to attend the RSRT as directed) attract a penalty of six months’ imprisonment (s89).

Special rules apply to regulate the interaction between civil and criminal proceedings involving the same facts (ss56–61 inclusive).

Conclusions

Whether or not it is accepted as the most appropriate strategy to address safety issues,16 it is clear the RSR Act presents an ambitious attempt at regulating the road transport industry. In addition to having national application, the extension to contractor relationships and industry participants means the legislation is likely to have widespread impact – for businesses and, potentially, also for end consumers. The legislative framework draws heavily on the FW Act model (we note that amendment of the FW Act, rather than introduction of stand-alone legislation, was considered as a regulatory option),17 and it will be interesting to see how much influence FWA jurisprudence may have. With operation of the RSR Act scheduled for ministerial review by 31 December 2015 (s120), the next three years appear to present significant new challenges for the road transport industry.



EMMA GOODWIN is a senior associate, and BIANCA FRIEDMAN a solicitor, with King & Wood Mallesons. The views expressed are those of the authors and do not necessarily represent the views of King & Wood Mallesons.

1. See, for example, Commonwealth Safe Rates Advisory Group, Safe Rates Safe Roads Directions Paper (2010) at http://tinyurl.com/ctumlby; and National Transport Commission, Hon Lance Wright QC and Professor Michael Quinlan, Safe Payments: Addressing the underlying causes of unsafe practices in the road transport industry (2008): www.ntc.gov.au/filemedia/Reports/SafePaymentsFinalReportNov08.pdf.

2. See the discussion of stakeholder views in Steve O’Neill, Leah Ferris and Paula Pyburne, Road Safety Remuneration Bill 2011, Bills Digest No. 88 2011–12, 19 January 2012, pp7–10: http://tinyurl.com/c57oy3a.

3. House of Representatives, Commonwealth, Parliamentary Debates, 23 November 2011, 13537 (Hon Anthony Albanese, Minister for Infrastructure and Transport).

4. Revised Explanatory Memorandum, Road Safety Remuneration Bill 2012, [8]: http://tinyurl.com/7vfo7rf.

5. Note 3 above, 13536. In this article, references to specific sections relate to the Road Safety Remuneration Act 2012 (Cth) unless otherwise indicated.

6. As defined in the Road Transport and Distribution Award 2010; Road Transport (Long Distance Operations) Award 2010; Transport (Cash in Transit) Award 2010; and Waste Management Award 2010 (available at www.fwa.gov.au).

7. Note 4 above, at [34].

8. Hon Bill Shorten MP, Minister for Employment and Workplace Relations, Financial Services and Superannuation and Hon Jacinta Collins MP, Parliamentary Secretary for School Education and Workplace Relations, “National road safety tribunal to improve safety for Australian road users”, Joint Media Release, 30 June 2012: http://tinyurl.com/c9hdrzu.

9. Note 8 above.

10. Note 8 above.

11. See Road Safety Remuneration (Consequential Amendments and Related Provisions) Act 2011 (Cth).

12. Note 3 above, 13536.

13. Note 4 above, at [118].

14. Note 4 above, at [113] and [122].

15. Note 11 above, Schedule 2, s1A. In exceptional circumstances, an application may be made prior to this date.

16. Note 2 above, p8.

17. Commonwealth, Regulation Impact Statement to the Road Safety Remuneration Bill 2012, xxix: http://tinyurl.com/6ogsbct.

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