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From the Desk of the Executive Director

Ken Phillips is co-founder and Executive Director of Independent Contractors of Australia. He is a published authority on independent contractor issues and directs research on related commercial and trade practices issues. Through his numerous articles in newspapers and think-tank and academic journals, Ken is known for approaching issues from outside normal perspectives and is frequently sought out for media comment.

In the headlights of an IR collision

Thursday, December 22, 2011

When trying to keep up with the multiple agendas of the Gillard government, it's easy to 'fall asleep at the wheel' and miss seeing a semi-trailer about to hit. In the latest industrial relations development, that's metaphorically what's about to happen.

In the last parliamentary sitting week for the year, the government laid on the table a new bill that seeks to control the price of trucking across the nation. The consequence of the passing of the bill will be a significant increase in the cost of road transport, a decline in productivity in the sector, lower incomes for truck drivers and a huge power grab by the Transport Workers Union.

For the TWU, this is an expanded agenda on the power grab they tried at Qantas. That is, at Qantas, the TWU showed they were seeking to control management decisions. With this new Gillard government bill, the TWU seeks to control road transport across Australia. Further, the bill lays out a template by which unions, through industrial relations tribunals, can control and fix prices under commercial contracts.

The bill, the Road Safety Remuneration Bill 2011 does this under the pretence of improving road safety. The government's line is one promoted by the TWU for a long time; they argue that the operation of a competitive commercial market in trucking forces down pay rates and puts truck drivers under pressure to speed, take drugs and break road laws.

Under this reasoning, the blame for any illegal and dangerous driving by truck drivers lies not with individuals who break the law, but with the people who pay them. The TWU and Gillard government have been active in commissioning and producing reports that substantiate this claim.

Their 'solution' in this bill is to create a new tribunal, effectively administered by Fair Work Australia, that will set 'safe' rates for drivers. Apparently by setting income rates under commercial trucking contracts, truck drivers won't break the law.

For example, early this year the courts supported Cootes Transport Group after they sacked a fuel truck driver for repeatedly using his mobile phone while driving. The court said the driver had engaged in 'gross and wilful' misconduct that endangered the public with potential 'disastrous consequences.' Supposedly the government and the TWU must be arguing that had 'safe rates' been applied, the driver would not have behaved in this dangerous manner.

This line of argument, however, is itself either deeply dangerous or a mask for a different agenda. I reason there's a different agenda.

Rates for drivers who are employees are already controlled by FWA under awards and enterprise agreements. If there was any sense to the government/TWU argument, provisions could have been made under the existing workplace laws covering employees. They have not done this.

Instead, the new bill is squarely aimed at capturing self-employed owner drivers, the thousands of small business people operating their own trucks. These people are not within the jurisdictional reach of the TWU. In New South Wales, however, they are.

The NSW TWU has for a long time been the statutory policeman under unique laws that give the NSW industrial relations commission control of commercial trucking rates. It seems to be a form of price fixing and would appear to breach competition laws.

Drivers suffer under this regime because the laws send driver incomes south. A feature of the NSW model is that companies that engage drivers must boost bad drivers' incomes by taking work from good drivers. Productivity drops. Truck drivers' incomes drop but costs go up. Go figure!

The head of the TWU, Tony Sheldon, emailed federal MPs imploring them to support the bill on safety grounds. I've replied to MPs cautioning them on its implications, and in a more detailed analysis I've explained why the bill is deficient.

There's a lot at stake. The bill creates monopolised control of prices in a vital free market sector. National productivity will suffer. It fits a broader pattern. Through legislative pandering to vested interests, the wealth-generating ability of our nation is being eroded.
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