Two biggest firms look hard at RSRT order impact

By: Rob McKay


Toll rejects view that it and Linfox wanted lower their subbies’ rates but using fewer of them remains a possibilty if costs dictate

Two biggest firms look hard at RSRT order impact
Toll is keeping a keen eye on the impact of minimum rates order.

 

The future of the biggest transport and logistics firms’ policy towards contractors, subcontractors and owner-drivers is still unclear following the Road Safety Remuneration Tribunal’s (RSRT’s) recent safe rates order.

But there is little doubt the issue is being considered very seriously in light of the Contractor Driver Minimum Payments Road Safety Remuneration Order.

"Toll is still analysing the impact of the Order, but it seems likely to significantly increase the cost of engaging owner-drivers," a company spokesperson says. 

"This will inevitably require Toll to consider whether it is commercially feasible to use them. 

"In its evidence to the Tribunal, Toll foreshadowed the possibility of reducing its owner-driver fleet if the effect of any Order was to increase our operating costs."

For Linfox, the issue has always been about safety and sustainability in a part of the business that is an adjunct rather than the main game.

"The business predominately operates a company driver operation, but does include owner drivers in its fleet composition to ensure it can provide customers the most effective and flexible service," a Linfox spokesperson says.

"Consequently it is always looking for operational improvements. 

"The recent decision of the Road Safety Remuneration Tribunal has not altered this long held approach to the business. 

"The business has, from the outset, supported the making of an Order in the retail and specific sectors of the long distance road transport industry.

"Further, the business has always held the view that a sustainable and safe transport industry is paramount and it continues to hold this view." 

Toll and Linfox put together a joint submission to the RSRT during consultation on the Order backing the general thrust but highlighting their concerns on the direction it was heading.

However, Toll has rejected an analysis of the RSRT decision and observations by RSRT president Jennifer Acton in a report in ATN sister publication Owner Driver.

"The submission sought to assist the Tribunal establish minimum pay rates in the supermarket distribution sector that reflected market and economic realities," its spokesperson says. 

"Our aim was to derive rates that would allow a driver to receive a fair wage based on relevant Award levels and to achieve cost-recovery on the running and fixed costs of providing a vehicle. 

"It is correct that we encouraged the Tribunal not to set rates in the long distance sector. 

"It was, and remains, our concern that the complexities of the sector and the wide variety of work it covers makes it imprudent to adopt a ‘one size fits all’ approach."

In her written judgment establishing the new rates structure, Acton notes the disparity of the firms’ proposal and the current rate it pays, but Toll sees this as a misunderstanding of their position.

"It’s true that some of the rates suggested by the submission are at levels below that paid in certain parts of Toll’s business, but impugning our submissions based on evidence regarding current Toll rates misses the point," the spokesperson says. 

"We believe that the Tribunal should establish appropriate and fair minimum rates for the entire industry. 

"To benchmark rates against what a single transport operator pays is inappropriate, especially when that operator is the largest in the industry.

"This will affect many more businesses than just Toll and Linfox so the benchmark needs to reflect beyond that."

The pair’s position was based on hours per week, weeks per year and kilometres travelled, and the "realistic cost of providing and running a vehicle".

 "The entire submission sought to ensure that any Order made by the Tribunal reflected operational and economic reality for the whole industry," the Toll spokesperson says.

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