RSRO survey uncovers hirer inability to comply

Close to 80 per cent hirers surveyed say they will not be in a position to comply with RSRO by April 4

RSRO survey uncovers hirer inability to comply
Survey shows respondents feel under-prepared for the change.


The Australian Chamber of Commerce and Industry, and the NSW Business Chamber and its affiliate, Australian Business Industrial, are calling for a delay in the implementation of the minimum rates order for contractor drivers.

The grouping's position is in line with the opinion of many industries bodies and transport operators, suggesting that the industry is not yet able to comply with the 2016 Contractor Driver Minimum Payments Road Safety Remuneration Order (RSRO).

In its submission to the Road Safety Remuneration Tribunal (RSRT), the group states that there is "widespread confusion and anxiety" about the Order that is "best demonstrated by the sheer number of statements and submissions that have been received by the Tribunal".

It states that businesses need more time to "implement appropriate administrative arrangements" in order to comply with the Order and "mitigate the adverse impact" as a result of the change.

The submission is based on quantitative analysis of data collected from a recent survey by the NSW Business Chamber and Ai Group, which has been coopeartating with the National Road Transport Association in the RSRO resistance campaign.

Based on the data collected, 78 per cent hirers say they will not be in a position to comply with the Order by April 4.

While 68 per cent say that a deferral to January 1 next year will help them restructure their business, 55 per cent agreed that a deferral will give them opportunity to renegotiate commercial arrangements with customers.

Up to 91 per cent of contractor drivers did not find out about the Order until February or March 2016.

Up to 58 per cent hirers say that RSRO will increase the rates payable to contractor drivers, while 39 per cent were unsure of the impact on rates and only three per cent hirers said that it will decrease the rates payable.

The supply chain participants echoed a similar view with 67 per cent stating that they do not understand their obligations under the Order.

Nearly 90 per cent supply chain participants say they have not reviewed their contracts to determine whether they contain terms that prevent or impede compliance with RSRO.

Out of more than 1800 responses sought, 75 respondents completed the survey.

The submission notes that while the sample size of the joint survey is not optimal, it reflects a general overview of the industry’s opinion.

The group asks the Tribunal to reconsider the implementation date or it could result in a "detrimental impact on the movement of freight across the nation and, in turn, a detrimental impact on the national economy".

"A delay to the implementation date will give the Fair Work Ombudsman (FWO) and/or the Tribunal further time to develop public material explaining the 2016 Order, its coverage, order’s variables and weighting so that people can understand how the rates are derived," the submission states.

It also highlights the vulnerability of operators and owner-drivers in rural, regional and isolated areas, saying that they could potentially be the worst-hit among the sector.

However, the group supports, in principle, the implementation of transitional provisions that include gradual phasing-in the new rules over a period of years and allowing "all operators in the industry to make sensible and sustainable adjustments to ‘market rates’ over time" so that the it does not destroy businesses.

The submission also includes suggestions for the proposed transitional provisions such as clarifying the terminology used in the Order and the length of contracts for contractor drivers and hirers to be able to utilise the transitional provisions.

The group represents the interests of businesses in the road transport industry and supply chain that will be affected by the Order.

The group had earlier called for a "reasonable transition period" before the Order was passed adding that "it would be appropriate to provide industry with a 12 month implementation period to allow it to come to terms with any regulation".

The RSRT is due to decide before the end of March if it will postpone minimum rates until January 1, 2017 and phase them in gradually.

It had earlier given the industry until noon, March 21 to lodge written submissions about varying the start date.

The Order sets hourly and kilometre rates for owner-drivers involved in linehaul and supermarket distribution operations, while many segments of the industry argue that the rates mandated by the RSRT can potentially drive the smaller operators out of business.

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