Ignoring evidence, safe rate opponents stand firm

Industry groups attempt to scuttle introduction of safe rates, claiming proposed reforms should not go ahead

Ignoring evidence, safe rate opponents stand firm
Ignoring evidence, safe rate opponents stand firm
By Brad Gardner | February 3, 2011

Industry groups are trying to scuttle remuneration reform of the trucking industry, claiming government intervention to set freight rates should not go ahead.

In a submission to the Federal Government’s Safe Rates, Safe Roads discussion paper, the Australasian Fleet Managers Association (AFMA) claims that speed and fatigue – not economics – are the primary forces behind unsafe driving.

It levels blame at truck drivers for poor safety practices, adding that chain of responsibility laws and fatigue management legislation should be enough to lift safety standards.

"We would suggest that the core issues are a lack of knowledge and skill on the part of drivers and the existence of a culture where it is acceptable to make a conscious decision to break existing laws," AFMA writes.

According to AFMA, setting freight rates will lead to an overly complex system with large compliance costs.

In its submission, the South Australian Road Transport Association (SARTA) claims the discussion paper "fails to establish any credible argument or present any credible evidence that altering rates of pay" will improve road safety compliance.

A vehement opponent of rates reform, SARTA claims speed and fatigue laws are "directly relevant and more powerful" and safe rates "is based upon a false and unsubstantiated premise" that drivers will work safely and less hours under the the scheme.

The Federal Government is currently receiving feedback on its proposal to establish a body capable of setting rates for sub-contractors to ensure they are not forced to jeopardise safety to make ends meet.

The move is in response to the work of academics and the National Transport Commission (NTC) that have found a link between poor safety and low rates of pay.

The Safe Rates, Safe Roads discussion paper draws upon a 2008 report by the NTC and the work of leading transport academics in justifying government intervention in the marketplace.

The report notes the work of respected US transport academic Associate Professor Michael Belzer, whose studies revealed a direct link between pay and safety.

In a study with JB Hunt, one of the US’ largest trucking companies, Belzer found that every 10 percent increase in pay reduced the probability of a crash by 36 percent.

Another study of 102 transport carriers over one year found that for every 10 percent increase in pay there was a 9.2 percent drop in crash rates.

The NTC cites the work of Professor Ann Williamson, whose surveys and studies found that drivers paid under incentive-based schemes were more likely to take stimulants to drive long hours to earn more money.

The NTC also references coronial inquests in South Australia and NSW that ruled reward-based payments such as kilometre rates were dangerous.

According to the same report, the Director of the Institute of Transport and Logistics Studies at the University of Sydney, Professor David Hensher, found that freight rates had a significant influence on speed.

Furthermore, the NSW Industrial Relations Commission states: "We consider that…there is a direct link between methods of payment and/or rates of pay and safety outcomes."

AFMA or SARTA did not provide any evidence in their submissions refuting the findings mentioned in the NTC’s report.

The Safe Rates, Safe Roads paper also references the work of Professor Michael Quinlan and Lance Wright QC, who both investigated a link between safety and pay.

"Major stakeholders in the industry continue to deny there is a connection, while essentially proffering little if any research or credible evidence to discount or provide alternative explanations to research indicating that such a connection exists," the authors noted.

While SARTA claims a safe rates scheme will price sub-contractors out of the market and lead to rises in key export products, Williamson says remuneration reform will benefit the trucking industry.

She says higher rates will improve driver retention and attract people to the industry, a claim supported by Wright and Quinlan.

"It is at least arguable that making the heavy vehicle industry more attractive (in terms of pay and hours) would address both labour shortages and enhance occupational health and safety outcomes in the longer term," their report notes.

Despite SARTA and AFMA maintaining that speed and fatigue legislation is enough to improve safety, the NTC and Quinlan have previously dismissed the claims.

Both point out that fatigue and speed are symptoms because it is low rates of pay that encourage sub-contractors to drive faster or for long hours.

The NTC says remuneration reform will lock in the benefits of chain of responsibility and speed legislation by removing the economic incentives to break the law.

"The NTC believes that until the root causes of unsafe driving practices are addressed, addressing the on-road behaviours will never sufficiently resolve the safety problem," it says.

SARTA also used its submission to oppose a government recommendation to extend employee rights to sub-contractors.

One of the options raised in the Safe Rates, Safe Roads discussion paper proposes allowing Fair Work Australia to set employment-like terms and conditions for owner-drivers to guarantee they are paid enough to cover operating costs.

SARTA Executive Director Steve Shearer, who authored the group’s submission, says owner-drivers elected to be in a business and should therefore not be treated like an employee.

Shearer also claims that it would be "inappropriate" for government to "meddle" with back-loading rates, saying remuneration should be left to the marketplace to determine.

Parliamentary Secretary for Workplace Relations Senator Jacinta Collins, who accepts evidence linking pay rates to safety, this week extended the deadline for responses to the Safe Rates, Safe Roads discussion paper.

The paper recommends establishing a tribunal with the capacity to set different rates for industry sectors and distinct rates based on vehicle configurations and types of trucks.

The paper says a safe rate will be the minimum rate necessary for an owner-driver to recover and earn the equivalent of the Award wage while driving safe and reasonable hours.

The Transport Workers Union (TWU) wants an independent tribunal set up that has the power to rule beyond the driver and company by holding other players in the supply chain accountable.

Do you have an opinion on the safe rates issue? Are SARTA and the AFMA correct? Should the Federal Government press ahead with safe rates?

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