Unfair contracts law must be part of the industry reviews
One of the industry issues crying out for reform is the current industry practice of customers expecting transport operators to accept substandard and unfair contracts.
NatRoad members are increasingly concerned that contract conditions in the industry are creating unfairness and adding to commercial pressures.
These practices add to a culture that does not give safety the primary focus. NatRoad has expanded on these arguments in two submissions.
The first submission to the Heavy Vehicle National Law Review outlined the problem and sought a recommendation that there should be a step up in enforcement along the Chain of Responsibility (COR).
Customers who create, for example, unrealistic time slot requirements should be prosecuted, especially where the contract says that missing a time slot means the operator doesn’t get paid but still must deliver the goods, a provision NatRoad has seen in some contracts that cross our desks.
Operators believe that they are targeted for prosecution because it is easier for the authorities to act.
Prosecuting those up the chain will assist with changing this outlook and also appropriately focus on those who are riding roughshod in an intensely competitive industry.
Read how NatRoad sees the Senate industry probe addressing the issue, here
The second submission was to the assistant treasurer.
Whilst small business has had protection from unfair terms imposed by standard form contracts from November 12, 2016, that protection needs to be strengthened as the current law is inadequate.
Under the current law, penalties cannot be imposed against a customer for including or relying on an unfair contract term in a small business contract. An application needs to be made to a court and the court can then declare the identified unfair terms to be void and therefore not enforceable.
The federal government said it was going to review this issue as at present the Australian Competition and Consumer Commission (ACCC) or other parties can’t get penalties to stop the practice – they also can’t issue infringement notices against companies that include unfair terms in their small business contracts.
So, there is little reason for companies to take out these provisions from their transport contracts unless the ACCC uses scarce resources to take them to court.
We therefore asked the government to bring on a quick review of the law and to more strongly prohibit unfair contract terms.
We want the government to introduce penalties where unfair contract terms appear in a contract.
We also advised the Assistant Treasurer that greater fairness in the industry can be brought about by the federal government acting to introduce a mandatory code for the industry under Part IVB of the Competition and Consumer Act 2010 (Cth), which would address harsh payment terms in transport industry contracts inclusive of a “pay when paid” prohibition and a maximum30-day payment provision.
If that government action doesn’t occur, then even more focus on COR prosecutions up the chain must be taken now.
The mindset of some customers must change so that safety and fairness are advanced, and the law should be strengthened so that there is an incentive for customers to make changes to their contracts.
Warren Clark is NatRoad’s chief executive officer