TWU denies rates order will hurt owner-driver viability

By: Brad Gardner


Senior TWU official says new rates structure for owner-drivers could make industry more attractive to prospective entrants.

TWU denies rates order will hurt owner-driver viability
TWU national assistant secretary Michael Kaine.

 

A senior Transport Workers Union (TWU) official has dismissed claims that minimum rates for owner-drivers will price them out of the market for work.

TWU national assistant Michael Kaine says trucking companies and supply chain operators will continue to need owner-drivers even if the Road Safety Remuneration Tribunal (RSRT) introduces mandatory minimum hourly and kilometre rates for contractors.

A number of parties, such as Toll and Border Express, have warned of the likely impact including that a lot of work will be brought in-house should the RSRT’s proposal — which includes payment for waiting time and rest breaks — be introduced on January 1, 2016.

However, Kaine points to the flexibility owner-drivers provide companies, including saving them from investing in capital and aiding them during peak demand for work when employees are not available to do the job.

"There will always be a place for that type of small business that can provide a professional service on short notice or on an as-needs basis that stands outside a standing fleet," he says.

Kaine points to New South Wales as proof that minimum rates will not lead to the demise of owner-drivers. The state regulates owner-driver contracts, including remuneration, with other parties, and Kaine says that has provided a stable environment for owner-drivers.

The RSRT is holding hearings over four days from October 22 on its rates proposal, and Kaine says the union will be there to argue the case for the tribunal to mandate minimum rates federally.

"I think it is a critical moment for the industry because there has been a lot of scaremongering going on out there by some employers saying that owner-drivers will be priced out of the market," he says.

"The fact of the matter is that owner-drivers are already being factored out of the market — bankruptcy or being killed — and this is a real opportunity for sustainability."

Kaine says the industry and the broader community should support the RSRT's plan.

"It will have the effect of taking a giant step towards ensuring owner-drivers…get appropriate cost recovery and are not being worked so hard there are safety implications and dangers for the community," he says.

DRIVER SHORTAGE

Kaine adds that the RSRT’s plan to guarantee rates could encourage more young people to enter the industry.

"If you’ve got an industry that is killing people at the rate of 300 a year on our roads you’ve got an industry where you’re expecting small businesses to invest in loss-making enterprises then you’re not going to be industry that is going to attract people," he says.

"If, on the other hand, you’ve got an industry that has got a watchdog that is making sure those at the top of the chain are paying their fair share, meaning that if you want to make a small business investment in your own vehicle that you can have a good deal of confidence that you are going to get at least cost recovery for your operation…then, yes, there is a very real possibility that people will be attracted to that.

"So it is useful for the needs of the industry that is just growing exponentially and where it is hard to attract drivers. It’s obviously in the public interest to have drivers out there who are not having to work too fast or too long to try and make ends meet on any particular day or week."

Critics of the RSRT’s proposal have complained a January 1, 2016 start date does not give companies enough time to implement the required processes to ensure compliance.

Kaine says work on minimum rates for owner-drivers has been going on for almost two years, involved almost 30 meetings and that parties should be prepared.

"Any suggestion from any party that they haven’t had time to think this through is just not genuine," he says.

"It’s been a long process but it’s been a good one, it has certainly been thorough. There have been some very positive, productive and constructive contributions by some employers. There have also been some obstructionist approaches as well."

Some parties have also criticised the KPMG-developed cost model that outlines minimum rates based on driver classification, vehicle class and whether equipment is provided for the job, but Kaine says no alternative model has been produced.

"If there is a view that they are wrong or should be different, then that is able to be put up to that tribunal," he says.

"The task before the tribunal is a simple one: under their statute they have to ensure that drivers are paid for all the work that they do and that owner-drivers get cost recovery, enforceable rates. That’s what they need to do and that’s what they should do."

 

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