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Issue #1708      October 28, 2015

Safe minimum rates for owner-drivers

The Transport Workers’ Union (TWU) says owner-drivers should be paid for overtime work and when taking mandatory fatigue management rest breaks.

The TWU has come out strongly in favour of a proposal to fix pay rates for owner-drivers, ahead of scheduled hearings that will help determine if the plan goes ahead.

The union has lodged a formal response to the Road Safety Remuneration Tribunal’s (RSRT) draft order on contractor pay, backing the move while pushing for higher rates and taking aim at its critics.

The RSRT set aside four days October 22 to 25 in Melbourne for hearings on its draft payments order, which proposes varying minimum rates for those delivering goods to supermarket chains or over long distances and includes payments for waiting time and loading and unloading trucks.

“There is nothing that has been put forward that could possibly suggest there is no need to take action to set appropriate enforceable rates for contractor drivers engaged in supplying supermarket chains or long distance operations,” the TWU’s submission says.

The TWU wants owner-drivers to receive overtime payments once they work in excess of 38 hours per week, similar to what employees receive. The submission claims the KPMG cost model used to determine the proposed rates did not factor this in, leading the TWU to argue for an almost double-figure increase in the proposed hourly payment.

“On the basis that contractor drivers should be compensated for their labour at least to the level of an employee driver, the labour cost component should incorporate an overtime provision. This would increase the hourly rate in the calculations by approximately 8 percent,” the TWU’s submission states.

While sectors of the trucking industry have claimed the hourly and kilometre rates in the KPMG model are too high, the union says such critics have failed to provide evidence or a comprehensive alternative rates model to support their claims.

“It is not sufficient for interested parties to assert that the assumptions or costings utilised by KPMG will, in some circumstances, understate or overstate the actual costs incurred by an individual road transport driver in undertaking his or her business,” its submission says.

“The question for the tribunal to consider is whether or not the approach undertaken by KPMG with respect to particular cost components represents a reasonable and appropriate standard to provide for the basis for rates contained within an RSRO. The TWU submits it does so.”

The TWU has also refuted claims the RSRT’s plan will, if introduced, price owner-drivers out of the market and encourage companies to switch to employee drivers.

“The TWU does not believe that these concerns are genuine. The making of an RSRO [road safety remuneration order] based upon the Draft Order should not have any effect upon the competitive position of contractor drivers, particularly if combined with effective supply chain provisions to ensure appropriate enforcement,” its submission says.

“To the extent that it is suggested that hirers may choose to directly operate vehicles using employee drivers, this would only represent an attractive option if contractor drivers are currently being engaged in a manner that fails to create viable businesses for contractor drivers that at least ensure the driver is remunerated for the labour component of the work.”

Furthermore, the TWU says there is no evidence presented to date to argue mandatory rates will have a significant effect on areas reliant on the trucking industry or negatively impact the economy or the transport of freight.

“Nor is there any material rising above assertion that the making of an RSRO would affect the viability of business in the road transport industry,” the TWU says.

The submission supports the RSRT’s proposal to require payment for fatigue management breaks. The TWU argues that owner-drivers are required to take the breaks while completing a transport task so they should be paid for them.

“Fatigue breaks required to be taken by the National Heavy Vehicle Law or Regulations represent time during which a road transport driver is necessarily engaged in order to enable goods to be transported,” its submission says.

“If a road transport driver is engaged to transport goods which will require a period of seven and a half hours to complete, the driver must be provided with half an hour rest time in that period. That is, the time during which the driver is necessarily engaged to enable the goods to be transported is eight hours.”

Annual payment increases

The TWU supports the RSRT’s proposed 3.2 percent annual increases in payments from when the order takes place to when it is reviewed in four years’ time.

“The TWU submits that there is merit in providing for predetermined increases over a period into the future in order to provide certainty and clarity for hirers and contractor drivers,” it says. The tribunal recommends introducing minimum payments for owner-drivers on January 1 next year.

The TWU says an order “should be made to commence at the earliest convenient date”.

“The proceedings before the Tribunal in relation to the setting of contractor driver rates have been, appropriately, ongoing for some time. It is appropriate that reasonable and enforceable standards be made effective as soon as possible,” it says.

The RSRT selected Melbourne for a series of hearings from Thursday, October 22 to Sunday, October 25 on its draft remuneration order and the submissions that parties have lodged in response.

TWU national assistant secretary Michael Kaine says the hearings gave the union the opportunity to highlight the pressures owner-drivers face and the need to ensure they are paid fairly for their work.

He says owner-drivers currently are not able to make enough money to cover the costs of running their business and support their families.

“Because of this they are at risk of death and injury on the roads because of the pressure to skip breaks, speed, drive for longer with over-loaded vehicles in a stressed and tired state – all to meet unrealistic deadlines. A ruling on safe minimum rates is a key way to help stop this deadly cycle,” Kaine says.

“These hearings will allow us to publicly show how vital safe minimum rates are for the entire community. For too long drivers and their families alone have had to bear the costs of pressures on the transport industry.”

Next article – Nauru sexual assault

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