New Laws to Reguate Pay and Conditions of Transport Workers

The Federal government has recently introduced new legislation into Parliament called the Road Safety Remuneration Bill 2011 (RSR Bill). If it becomes law, this legislation will add a further layer of regulation to an already complex industrial relations system with which most employers in the transport industry will need to comply. 

What are these new laws about?

The RSR Bill proposes new employment laws (RSR laws) relating to minimum rates of pay and other entitlements for road transport drivers (both employees and owner drivers). These laws are intended to address underlying economic factors that the Government believes are creating incentives for, or encouraging, unsafe on-road practices in the transport industry, such as speeding, excessive working hours and unpaid queuing time.  

What will be the effect of the new laws?

The RSR Bill will create a Road Safety Remuneration Tribunal made up of some members from Fair Work Australia that will have the following powers: 

• Make “road safety remuneration orders” (RSROs) which will apply to road transport employees and/or self-employed drivers.  The RSROs will relate to matters such as minimum pay and other entitlements for road transport drivers (in excess of modern award minimums); set minimum pay and conditions of engagement for owner drivers (i.e. workers not covered by modern awards); set conditions about industry practices for loading and unloading vehicles, waiting times, working hours, load limits and address practices which contribute to unsafe work practices.
• Make “safe remuneration approvals” (SRAs) in relation to “road transport collective agreements” between independent contractor drivers and their hirers. A SRA would set down pay and related conditions that the hirer is required to provide to all owner-drivers for up to 4 years.
• Resolve disputes between drivers, employers/hirers, and supply chain participants about remuneration and related conditions that influence whether the driver works in an unsafe manner, as well as disputes arising from the dismissal/termination of the contract of an employee/owner driver because the driver refused to work in an unsafe manner.

 Who is covered?

Coverage is very broad. The RSR Bill will apply to employee drivers and their employers, hirers and independent contractors, and “supply chain participants” in the “road transport industry”, being those sectors of the industry defined in the Road Transport and Distribution Award 2010, the Road Transport (Long Distance Operations) Award 2010, the Transport (Cash in Transit) Award 2010 and the Waste Management Award 2010.

When will it commence?

The RSR laws are expected to commence operation on 1 July 2012.

What are the implications of the new laws and what should employers do?

Employers, hirers and supply chain participants in the transport industry must understand the new laws because of the scope and breadth of the new regulatory framework. Some key issues that will require consideration and planning are the following: 

• It will not be possible to “contract out” of the RSR Bill. It is unclear at this stage how over-award payments made by employers will be able to offset and satisfy additional increases in remuneration or allowances made as a result of the RSR laws. Employers are encouraged to seek advice about offsetting clauses and update contracts of employment in readiness for the RSR laws.
• Modern awards or enterprise agreements will not override the RSR laws. A term of a modern award or an enterprise agreement (or collective agreement still in operation made prior to the Fair Work Act) will have no effect in relation to a road transport driver to the extent that it is “less beneficial” to the driver than terms created by the RSR laws. Employers will need to audit industrial instruments that apply in their workplace to identify inconsistencies between terms in those instruments and terms imposed by the RSR laws, to ensure compliance with minimum conditions imposed by the RSR laws.
• Civil penalties for breaches of the RSR laws will apply. Investigation and enforcement will be undertaken by the Fair Work Ombudsman.
• Unions will have a right of entry into workplaces to investigate suspected breaches of the RSR laws. Employers should understand right of entry laws under the Fair Work Act and review internal processes for managing such requests.
• The RSR laws are likely to make bargaining for pay and conditions under enterprise agreements more challenging for employers, because the RSR laws will set default industry standards, which bargaining representatives for employees will use to their advantage during negotiations for a new enterprise agreement.  It is strongly recommended that employers in the transport industry have a carefully planned bargaining strategy before commencing negotiations for a new enterprise agreement.

Rights to challenge dismissals or other “adverse action” will attach to the new RSR laws because the RSR Bill will be considered a “workplace law” for the purposes of the “general protections” provisions in the Fair Work Act for which employees or contractors may allege certain “workplace rights”.  This will mean that employers will need to think carefully and seek advice about decisions that are likely to have adverse consequences for transport drivers if those decisions can be linked to the RSR laws.