Commission agrees to cut sub-contractor rate

Australian Industry Group and big-name operators including Toll and CEVA win fight to cut sub-contractor rate

Commission agrees to cut sub-contractor rate
Commission agrees to cut sub-contractor rate
By Brad Gardner

The pay rate for some sub-contractors will be cut by almost 2 percent after the Australian Industry Group won a legal bid to amend a contract determination.

The NSW Industrial Relations Commission ruled in favour of an application to reduce remuneration by 1.97 percent for sub-contractors who work under the Transport Industry – Car Carriers Contract Determination.

Using witnesses from Toll, Advanced Car Carriers and CEVA Logistics, the AI Group argued sub-contractors were benefiting from an inflated rate because fuel prices had fallen 18.15 percent since the rate was last adjusted in April.

"Calculations at that time were based on the relevant cost components as at September 2008," Commissioner Peter Connor says.

The 1.97 percent cut took effect on August 13, after Connor rejected a request from the Transport Workers Union (TWU) to dismiss the application.

"…I propose to vary the car carriers contract determination in terms of the AIG application," Connor says.

The union’s Oshie Fagir labelled the AI Group’s application "frivolous" and claimed the commission had no right to agree to a decrease because Clause 5 of the determination only permitted increases.

But while agreeing with the TWU’s interpretation of the determination, Connor ruled it was unfair to discriminate against prime contractors.

"…I believe that to prevent car carrier principals the same rights that were available to the car carrier contract drivers by virtue of Clause 5 is fundamentally inequitable and, in my view, contrary to the spirit of the provision," Connor says.

The AI Group also tried to convince the commission to retrospectively apply the rate cut from May 24 this year, but Connor rejected the application.

"It is customary for variations to rates of remuneration in contract determinations to apply from the date of the decision…," Connor ruled.

He says applying retrospectivity will create "administrative difficulties" to contract drivers as well as principle contractors.

The matter was scheduled to be resolved earlier this year but both parties failed to reach an agreement.

Although fuel prices fell since the last rate adjustment, the commission was told insurance costs rose 1.6 percent, while the costs of tyres and maintenance increased by 1.95 percent and 0.88 percent respectively.

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