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Why the Road Safety Remuneration Bill 2011 should be rejected

Don't be tricked by the Transport Workers Union

16 December 2011, Updated 3 March 2012

In late November 2011, the Gillard government introduced the Road Safety Remuneration Bill into Federal Parliament. The Bill should be rejected. The government presents it as a road safety measure. Don't be fooled. It is a direct attack against self-employed truckies. It sets a model for further attacks against all self-employed people in Australia.

Updated 12 February and 3 March 2012
ICA has made a submission to the parliamentary inquiry.

We have written to federal members of parliament rejecting the call from the Transport Workers Union for MPs to support the Bill. Read our letter exposing the con.

In fact the Bill is a government ploy designed to give huge power to the Transport Workers Union.

The Australian Logistics Council also says reject the Bill in its submission.

Ken Phillips's associated Business Spectator article is here.

In delivering this power to the TWU, the Bill will probably breach competition principles and laws that prevent price fixing, will result in increases in road transport costs affecting all consumers, reduce productivity and suppress driver incomes. All this---and it would do nothing to improve the safety driving habits of truckies.

Here we explain why this is the case.

What the Bill proposes to do

Currently, truckies who are employees of transport companies have their wages established under awards and enterprise agreements authorized by Fair Work Australia.

Owner-drivers---that is, self-employed people who run their own business---operate under commercial law and the Trade Practices Act. If they want to bargain collectively to set rates, they can, but must apply to the Australian Consumer and Competition Commission for approval. Groups of owner-drivers have done this.

The new Bill plans to introduce a completely new Tribunal that will duplicate, overlap and probably override:
  • Fair Work Australia's oversight of employee truckies wages.
  • The ACCC's powers to ensure that price fixing and related illegal activity in the commercial trucking sector is stopped.
The new Tribunal will have the power to set wage and remuneration rates for ALL truckies, including employees and self-employed drivers. This is a recipe for complete confusion, and a bureaucratic shambles with overlapping authorities trying to work out what's going on. It's the Gillard government again going red-tape mad for the small business sector.

Why they are saying they are doing this

The government is claiming that truckies are not being paid enough and that, due to financial pressure, truckies speed, take drugs while driving, overload vehicles and generally drive dangerously, causing crashes. This is a line that has been pushed by the TWU for years.

What the government is effectively saying is that it is not blaming dangerous, illegal driving on the few bad truckies who behave badly, but the people who pay them. The TWU says that by pushing up the pay rates bad drivers will stop driving illegally and dangerously. The TWU has commissioned many reports over the years trying to prove this.

The argument, however, is immoral and deeply dangerous.
  • All drivers on the road must obey the road laws. Drunk drivers for example are not excused because they are on the dole or other, similar reasons. We might sympathise with them, but it's not an excuse for illegal, dangerous driving.

Has this been done before? Yes, in NSW. Has it improved safety? No

This new federal Bill is modelled on the New South Wales owner-driver laws that have been in place for many years but which are a complete failure.

In NSW, remuneration rates are imposed on self-employed owner drivers by the NSW Industrial Relations Commission. The TWU has enforcement powers under the laws. The effect of the laws is as follows:
  • Drivers who are efficient and good at their job should earn more than drivers who are not so good. The NSW laws force companies to take work away from the good drivers and give it to the poor drivers. This encourages bad drivers to stay in the sector and forces down the incomes of the good drivers. Productivity is pushed down. The cost of road transport is pushed up. Good drivers miss out.
Has this system improved driver safety in NSW? No! There is no demonstrable difference in trucking safety in NSW in comparison to the rest of Australia.

Here's an assessment of the NSW laws that ICA undertook in 2006.

What do the NSW laws do? They give power to the TWU

The NSW TWU is by far the largest, most powerful and wealthiest State branch of the union. It dominates the TWU across Australia because of its power and wealth.

This wealth and power comes about because of the NSW owner-driver laws. The laws give the TWU massive power to intervene in commercial trucking contracts in NSW even though this breaches the Trade Practices Act. Because the TWU is the effective enforcer of the laws, it is in a position to intimidate owner-drivers in NSW into joining it.

Are there other laws that protect owner-drivers giving them fairness? Yes

Victoria introduced owner-driver laws in 2005. These are much more reasonable. They require companies that use owner-drivers to supply specified documentation and other information to assist drivers to run their business properly. Any disputes are handled by the Small Business Commissioner in Victoria. The focus is on the rights of the owner-drivers, not on power to the TWU. These laws were introduced by a Victorian Labor government.

In 2010 the federal government introduce unfair contract protection laws for consumers. Originally, the government and opposition had agreed to apply these protection laws to self-employed small business people as well. If they had been applied, the laws would have offered significant protections to owner-drivers. Yet the federal government 'did the dirty' on small business people and did not give them unfair contract protections. These laws could be amended to give all small business people, including owner drivers, protection.

Why these laws threaten all self-employed people

The essence of being self-employed is that you earn your income through the commercial contract regulated by commercial and competition laws. That is, that you are a business person selling your services to clients at prices you determine. The law says that no-one can tell you what price to charge. You decide. It's your right. Yet this Bill will override your rights. It will impose prices on you under your commercial contract. It effectively takes away your capacity to be a business person. This Bill impacts only on owner-drivers in this respect. But it threatens all self-employed small business people. It is a beachhead of regulatory price control aggression. It is a template which, once achieved in one area, can be rolled out to all self-employed people. It should not proceed.

Key sections from the Federal Road Safety Remuneration Bill (Nov 2011)

[Road Safety Remuneration Bill 2011]

4 Definitions
compellable person means any of the following:
    (a) a road transport driver;

    (b) the employer or hirer of a road transport driver;

    (c) a participant in the supply chain in relation to a road transport driver, if the driver is involved in a matter the Tribunal is dealing with.
5 Meaning of road transport driver---general
A person is a road transport driver if:
    (a) the person is an individual to whom section 6 applies (but see subsection 7(2)); or

    (b) the person is a corporation to which section 7 applies.
6 Meaning of road transport driver---individual
    (1) This section applies to an individual (for the purposes of paragraph 5(a)) if:
      (a) the individual engages in the road transport industry by driving a vehicle to transport things by road; and
8 Meaning of hirer of road transport driver and road transport contract
    (1) A road transport contract is a contract for services under which a road transport driver who is an independent contractor is to provide road transport services to the other party to the contract (the hirer).

    (2) A reference to a road transport contract includes a reference to a condition or collateral arrangement that relates to the contract.

    (3) A road transport contract may be in writing, oral, or partly in writing and partly oral.
10 Concurrent operation generally intended
    (1) This Act is not intended to exclude or limit the operation of any other law of the Commonwealth or any law of a State or Territory that is capable of operating concurrently with this Act.

    (2) In particular, this Act is not intended to exclude or limit the operation of:
      (a) the Fair Work Act 2009; or

      (b) the Independent Contractors Act 2006 (but see section 14); or

      (c) Chapter 6 of the Industrial Relations Act 1996 of New South Wales (and any other provision of that Act to the extent that it relates to, or has effect for the purposes of, a provision of Chapter 6); or

      (d) the Owner Drivers and Forestry Contractors Act 2005 of Victoria; or

      (e) the Owner-Drivers (Contracts and Disputes) Act 2007 of Western Australia; or

      (f) a law of a State or Territory that is specified in regulations made for the purposes of this paragraph, to the extent that the law is so specified.
    (3) However, this section is subject to the other provisions of this Subdivision.
11 Interaction of enforceable instruments with State and Territory laws
An enforceable instrument prevails over a law of a State or Territory, to the extent of any inconsistency.

13 Interaction of enforceable instruments with road transport contracts (independent contractors)
A road transport driver who is an independent contractor is entitled to be provided, by the required provider under an enforceable instrument that applies to the driver, with at least the remuneration and related conditions in the enforceable instrument, regardless of the terms of any road transport contract to which the driver is party.

14 Interaction with the Independent Contractors Act 2006
For the purposes of paragraph 15(1)(d) of the Independent Contractors Act 2006, an enforceable instrument that applies to a road transport driver whose services contract is being reviewed under that Act is a matter the Court under that Act might (but is not required to) think relevant.

19 Power to make a road safety remuneration order
    (1) The Tribunal may make a road safety remuneration order under this Part consistent with the object of this Act.

    (3) The Tribunal may make the order on application by any of the following whether or not the order is in relation to a matter identified in its work program:
      (a) a road transport driver;

      (b) an employer or hirer of a road transport driver;

      (c) a participant in the supply chain in relation to a road transport driver;

      (d) a registered employee association that is entitled to represent the interests of a road transport driver to whom the order will apply;

      (e) an industrial association that is entitled to represent the interests of a road transport driver, employer or hirer of a road transport driver or participant in the supply chain in relation to a road transport driver, if:
        (i) the person or each person whose interests the industrial association claims to be representing by making the application has consented to the making of the application; and

        (ii) the Tribunal has permitted the application to be made.
27 Making road safety remuneration order
What the order may deal with
    (1) If the Tribunal decides to make a road safety remuneration order, the Tribunal may make any provision in the order that the Tribunal considers appropriate in relation to remuneration and related conditions for road transport drivers to whom the order applies.

    (2) Without limiting subsection (1), the Tribunal may make provision in the order in relation to any of the following:
      (a) conditions about minimum remuneration and other entitlements for road transport drivers who are employees, additional to those set out in any modern award relevant to the road transport industry (see subsection 20(2));

      (b) conditions about minimum rates of remuneration and conditions of engagement for road transport drivers who are independent contractors;

      (c) conditions for loading and unloading vehicles, waiting times, working hours, load limits, payment methods and payment periods;

      (d) ways of reducing or removing remuneration‑related incentives, pressures and practices that contribute to unsafe work practices.
40 Tribunal may deal with disputes about remuneration and related conditions
    (1) The Tribunal may deal with a dispute if:
      (a) section 41, 42 or 43 applies to the dispute; and

      (b) an application is made by:
        (i) a party to the dispute; or

        (ii) an industrial association that is entitled to represent the interests of a party to the dispute, if the party has consented to the making of an application by the association.
42 Disputes involving independent contractor road transport drivers
Dispute between independent contractor and hirer
    (1) The Tribunal may deal with a dispute between a road transport driver who is an independent contractor and the hirer of the driver if the dispute is about remuneration or related conditions in a road transport contract between the driver and hirer that could affect whether the driver works in an unsafe manner. The parties to the dispute are the driver and the hirer.
Dispute between independent contractor and former hirer
    (2) The Tribunal may deal with a dispute between a road transport driver who is an independent contractor and a former hirer of the driver if:
      (a) the dispute is about the former hirer terminating the road transport contract; and

      (b) the driver contends that the termination was mainly because the driver refused to work in an unsafe manner.
The parties to the dispute are the driver and the former hirer.

118 This Act is a workplace law
This Act is a workplace law for the purposes of the Fair Work Act 2009.

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