Enterprise update: New Road Safety Remuneration Bill introduced into Federal Parliament

December 2011 Author: Michael Serong

Contacts

Introduction

On 23 November 2011, the Federal Government introduced the Road Safety Remuneration Bill 2011 (the RSR Bill) into Parliament.

The RSR Bill proposes to create a new layer of regulation for all participants in the road transport industry. The stated object of the Bill is to ‘promote safety and fairness in the road transport industry’, particularly for owner-drivers and small transport operators. The Government estimates that these operators make up approximately 60% of the road transport industry, and of whom approximately 30% receive less remuneration than the relevant award rates for road transport employees.

Who will the RSR Bill apply to?

The RSR Bill will cover the broadly defined ‘road transport industry’, which includes the road transport and distribution, long distance operations, cash in transit and waste management industries. These industries are defined in the RSR Bill with specific reference to the four relevant industry modern awards.

The RSR Bill defines a ‘road transport driver’ to be either:

  1. An individual (either an employee or independent contractor) engaged to drive in the road transport industry, or
  2. A corporation engaged in the road transport industry, where a ‘related individual’ (who may be a director of the corporation or a member of a director’s immediate family) is engaged to drive a vehicle on behalf of the corporation.

The RSR Bill also applies to hirers of road transport drivers (whether those hirers are employers or not) and other participants in the supply chain who are involved in the transport services provided by road transport drivers. This includes consigners, consignees, intermediaries, or operators of premises used by road transport drivers for loading/unloading.

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Key elements of the RSR Bill

The key elements of the RSR Bill are as follows:

  1. To create the new Road Safety Remuneration Tribunal (the Tribunal). The Tribunal will be constituted by up to five Fair Work Australia (FWA) members (who will hold dual appointments to the Tribunal) and up to four other persons who have knowledge/experience in the road transport industry. It appears that the Tribunal will be less formal than FWA, as, while the Tribunal may hold a hearing in relation to any matters, the Bill provides that submissions on various matters are to be made in writing.
  2. The Tribunal will have four main responsibilities/powers, which are:
    1. To make Road Safety Remuneration Orders (RSROs). A RSRO is an order that can apply to any participant in the road transport industry. The purpose of a RSRO is to set minimum remuneration and conditions for road transport drivers (both employees and independent contractors), as well as conditions for reducing or eliminating unsafe or unfair work practices (such as time-based incentives to complete transport tasks). Road transport drivers will be entitled to, as a minimum, the terms of the relevant RSRO, regardless of the terms of the relevant industrial instrument or road transport contract in place.
    2. To make Safe Remuneration Approvals (SRAs). A SRA is similar to an enterprise agreement, and will be made between a hirer and road transport drivers who are independent contractors. SRAs will require majority approval from the drivers engaged by the hirer, and be subject to a ‘better off overall test’ when compared to the relevant RSRO. Like enterprise agreements, SRAs must contain a mechanism for annual increases in remuneration for drivers, and have an expiry date no more than four years from the date of approval. While a SRA is in effect, a RSRO will not apply.
    3. Conduct dispute resolution between all participants in the road transport industry, including in relation to any unsafe work practices or the dismissal/termination of contract of a road transport driver. The Tribunal will only have powers of arbitration if these are agreed by the parties. The relevant dispute resolution and termination of employment procedures under the Fair Work Act 2009 (FW Act) will continue to be available to employees.
    4. Undertake industry research through an annual work program.
  3. The Fair Work Ombudsman will have a compliance role in relation to enforcing orders and pursuing contraventions of the RSR Bill. As is the case under the FW Act, many of the provisions under the RSR Bill are civil remedy provisions and parties may be subject to a penalty for any contraventions. The RSR Bill is intended to operate concurrently with all other laws, either Federal or State, that regulate road transport drivers or the road transport industry.
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Implications of the RSR Bill

The RSR Bill, in its current form, sets a new standard of regulation for road transport drivers, particularly those who are independent contractors. The introduction of RSROs and SRAs are clearly intended to create a safety net scheme of regulation for these road transport drivers, and effectively creates a ‘third class’ of worker, who will be entitled to a similar safety net system as an employee under the FW Act, yet for all other purposes (i.e. taxation, superannuation or workers’ compensation) may continue to be treated as an independent contractor.

There are also important implications for road transport drivers who are employees. In addition to providing these employees with a guarantee that his or her relevant industrial instrument (i.e. modern award, enterprise agreement or transitional instrument) will not be less beneficial than a defined enforceable instrument under the RSR Bill (i.e. a RSRO, a SRA or a Tribunal order made through arbitration), the RSR Bill will also provide the right for employees to seek dispute resolution with all participants in the supply chain, and not just his or her employer.

The RSR Bill and the Road Safety Remuneration (Consequential Amendments and Related Provisions) Bill 2011 were referred to the Infrastructure and Communications Committee on 24 November 2011 for further consideration. Both Bills have a proposed commencement date of 1 July 2012.

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