They say retailers likely to be interventionist with transport firms if unchanged driver payments draft is approved
The Road Safety Remuneration Tribunal (RSRT) draft driver payments order will force retailers to research, manage, audit and report non-compliance in their transport functions and possibly audit transport companies and drivers annually, if adopted in its present state, legal experts say.
“The additional compliance costs will be substantial,” they say of obligations that supply chain participants would also face.
With just three weeks to go before submissions deadline on the draft Contractor Driver Minimum Payments Road Safety Remuneration Order [RSRO] 2016 and with a final hearing due next month, Andrew Farr and Daniel Proietto of law firm Lander & Rogers highlight likely responsibilities stemming from such an outcome.
They say transport provider contract provisions will have to:
- be consistent with payments order requirements
- sufficient for transport provider compliance with the order
- require the transport provider to comply
- permit the retailer to conduct an annual audit of compliance by the transport provider, and require the transport provider to co-operate with the annual audit.
They add that the retailer also has “an obligation directly to a road transport driver to audit the relationship between the transport provider and the road transport driver.
“This is even though there may be no relationship whatsoever between the retailer and the road transport driver.
“This obligation arises if the contract between the retailer and the transport provider is open ended or where the contract between the retailer and the transport provider are for periods of least 30 days in each year.”
If retailers give transport providers notice of non-compliance, failure to rectify it after a “reasonable period” allows for the contract to be terminated.
Meanwhile, the impact of a rigid application of the order on pay rates for differing transport sectors, as identified in the KPMG research report that informed the tribunal’s draft, has come in for critical comment.
Maurice Baroni and Rosemary Patti of McCabes lawyers say KPMG’s assumptions fail to take account of variations in respect of distance travelled, hours worked, fuel consumption and the cost of capital which arise in different sectors of the transport industry, and the size and type of the transport vehicle.
“McCabes has argued in submissions to the Tribunal that the Draft RSRO should adopt different rates for local work, long distance work and regional work,” they say.
“McCabes submitted that these differences within the transport industry are fundamental as they go to the root of how a RSRO (if any) should be drafted.
“Our view is that the KPMG Report currently adopted by the Tribunal makes unrealistic assumptions that should not form the basis of determination of pay rates in the transport industry.”
Farr and Proietto believe the order would inject significant extra costs into the supply chain as minimum payments rise.