What’s all this talk about Road Safety Remuneration?

There have been many major developments concerning minimum payments for contractor drivers in the road transport industry. Over recent days Ai Group has been heavily involved in proceedings before the Road Safety Remuneration Tribunal (RSRT) and in the Federal Court of Australia.

Ai Group application to vary a Road Safety Remuneration Order concerning minimum rates for contractor drivers

On 9 March, Ai Group applied to vary a Road Safety Remuneration Order which is causing widespread concern and confusion in the road transport industry and the community, and was set to come into operation on 4 April. The Order sets minimum rates for thousands of contractor drivers which, in many cases, are much higher than the existing rates that are being paid. The Order will undoubtedly increase costs for industry and consumers.

The Order was made by the RSRT on 18 December 2015. It applies to contractor drivers in relation to long distance operations, and contractor drivers in relation to items destined for sale or hire by a supermarket chain. Ai Group issued a relevant Member Advice in December.

Ai Group’s application sought a variation to the Order to extend the operative date to 1 January 2017 and to implement transitional arrangements to phase-in the new rates. A number of other parties also applied to vary the Order to extend the operative date.

Ai Group’s application was aimed at protecting the community from widespread job losses, damage to businesses and harm to rural and regional areas. Ai Group filed a number of submissions and an extensive amount of evidence in support of its application. The proceedings were listed for hearing on Easter Saturday, Easter Sunday and Easter Monday.

At 3pm on Friday 1 April, the RSRT handed down its decision refusing to delay the operative date for the order despite a large amount of evidence from Ai Group and other industry groups of major adverse consequences for road transport businesses, contractor drivers and the community if the new minimum rates took effect on 4 April.

The Tribunal also rejected a compromise position negotiated between Ai Group and the Transport Workers Union (TWU) to delay the operation of the new minimum rates until 1 October 2016 and to phase-in the rates over the period up to 1 October 2017.

Federal Court proceedings

Following the RSRT handing down its decision at 3pm on Friday 1 April, late that afternoon, Ai Group, ACCI, Toll and Linfox jointly sought an interlocutory injunction from the Federal Court stopping the rates coming into operation on Monday 4 April until the Court had heard our application for the Tribunal’s decision to be judicially reviewed.

In the evening, a Directions Hearing was held in Sydney before Justice Buchanan and the matter was listed for hearing on Sunday 3 April. The Federal Government intervened in the proceedings in support of Ai Group’s application.

Separate to the above developments in Sydney, that same afternoon NatRoad applied to the Federal Court in Brisbane for an order staying the RSRT’s order. Justice Collier granted the application and stayed the operation of the order. Given this development, Justice Buchanan cancelled the hearing on Sunday 3 April because, in effect, the outcome that Ai Group was seeking from Justice Buchanan had already been granted by Justice Collier.

On Saturday 2 April, the TWU applied to the Federal Court for an order setting aside the stay order granted by Justice Collier.

The various applications relating to the stay were joined and heard by the Full Federal Court at a full-day hearing on 6 April.

In a decision of 7 April, the Full Federal Court decided not to continue to stay the RSRT’s order. The Federal Court’s role was not to assess the merits of the Tribunal’s Decision but rather to consider legal arguments about longstanding legal principles regarding the granting of stays, and the application of such principles to this matter.

As a result of the lifting of the stay the new rates are in operation.

Release of reports of reviews into the RSRT

On 1 April, Employment Minister Michaelia Cash released the reports from two major inquiries into the Road Safety Remuneration Act 2012 and RSRT, both of which are highly critical of the current system. The Minister also announced a consultation process to consider the future of the Act and Tribunal.

Ai Group immediately refreshed its call for the abolition of the Act and Tribunal on the basis that the notion that paying truck drivers more or differently will lead to fewer road accidents is flawed.

The RSR Act and Tribunal are imposing anti-competitive arrangements on industry and are distracting Government and industry attention and resources away from the measures which are widely recognised as improving safety in the road transport industry such as the Heavy Vehicle National Law, the National Heavy Vehicle Regulator, improved roads, improved compliance and use of technology.

Legislation to be introduced into Parliament in April

On 4 April, Minister Cash announced that the Government would introduce legislation into Parliament in mid-April to ensure that orders setting remuneration rates for truck drivers cannot commence before 1 January 2017. It appears that the Government has the support of sufficient Crossbench Senators to pass the legislation.

In its public comments Ai Group welcomed the announcement on the basis that it would allow time for the consultation process recently announced by the Government to occur (see above) without the threat of widespread community and industry disruption, and loss of work for contractor drivers.

Prime Minister’s announcement about the abolition of the RSRT

On 10 April, Prime Minister Turnbull announced the Coalition will abolish the RSRT if it is returned to Government after the next election, consistent with the recommendations of the two inquiries referred to above.

Does your business employ contractor drivers affected by the Road Safety Remuneration Order? Please comment below to share your perspective on these recent events and the potential impact of the order on your business.

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Stephen Smith
Ai Group's Head of National Workplace Relations Policy, Stephen Smith is responsible for workplace relations policy development and advocacy. He regularly represents industry’s views to governments and opposition parties, and in numerous inquiries and major cases. He is Special Counsel for, and Chairman of the Board of, Ai Group Workplace Lawyers, a national law firm operated by Ai Group.

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