Victorian owner-driver Act passes parliament

Industry welcomes changes to payment terms and conditions

Victorian owner-driver Act passes parliament
Tim Pallas


Amendments to the Victorian Owner Drivers and Forestry Contractors (ODFC) Act have passed Parliament, granting stronger payment and conditions protection for contractors who own and drive their own vehicles.

Under the reforms hirers and brokers face significant penalties if they breach their obligations to provide safe and fair conditions for individuals classified as contractors, not legal employees.

It comes after a recent review found parties higher in the supply chain were breaching the Act by not providing information about rates and costs to owner-drivers or forestry contractors.

"Contractual arrangements were also not being properly recorded, with owner operators left with little recourse to pursue legal action if they wanted to contest issues," the Victorian government says in a statement.

"This led to unreasonably high safety, income and business risks for owner operators in these industries."

The amendments to the ODFC Act were proposed in May

Under the reforms, hirers and brokers face penalties of more than $16,500 as a body corporate or nearly $10,000 as an individual for noncompliance.

Amendments have also been made to the dispute resolution procedure under the ODFC Act to allow the Victorian Small Business Commission to arrange arbitration if disagreements arise.

Payment watchdog Wage Inspectorate Victoria will also be responsible for monitoring compliance with the Act.

"Regulation in the industry simply wasn’t working – we’ve strengthened the Act so that those who do the wrong thing face serious penalties," Minister for Industrial Relations Tim Pallas says

"This is about ensuring hard-working owner drivers in the transport and forestry sector get the fair and safe working conditions they deserve."

The Victorian government says it will conduct an information campaign before the laws come into force – though no date has yet been determined – to ensure that those affected are aware of their rights and obligations and know where they can find help.

Peak state transport body the Victorian Transport Association (VTA) welcomed the announcement.

"We strongly supported this legislation when it was proposed in May and are pleased with its passage through the Parliament yesterday," VTA CEO Peter Anderson says.

"It will improve conditions for all Owner Drivers and ensure that safety is paramount in all contracts.

"We commend Minister Pallas and the Government for working with the industry to legislate for better conditions for transport operators and those they employ."

Similarly, the Transport Workers Union (TWU) also hailed the announcement.

"Until now, many big companies have obtained control on aspects of the work owner drivers do, the owner driver bears all the risk and the company enjoys full flexibility in the relationship," TWU Vic/Tas branch secretary John Berger says.

"This area has been crying out for regulation and I congratulate the Andrews Government for successfully passing this Act to protect these small businesses and now giving us the ability to tackle matters front on through arbitration.

"We look forward to working with the State Government to immediately role out an education process to the industry."

It spotlights the following key changes:

  • Allows Owner Divers the ability to collectively negotiate, once an agreement is reached, Owner Drivers are able to lodge the proposed agreements into the commission. 
  • Low cost and accessible arbitration to hear disputes on contracts. 
  • Legal requirement that invoices are paid within 30 days of receiving the invoice.
  • Updating the definition of "freight broker" under the legislation to cover third party contracting platforms, such as gig-economy companies like Uber Freight.
  • Requires companies and freight brokers to provide Owner Drivers with the annually scheduled rates and costs, if the contractor is engaged under more than one contract during a 12-month period.
  • Legally requiring companies and contractors to provide tip truck drivers working alongside the building and construction industry with an information booklet, including the rates and costs schedule, regardless of the period of time in which the Owner Driver is contracted. 
  • Clarifies that Owner Drivers have the option to be covered by the same terms and conditions as an existing, regulated contract which has been previously jointly negotiated on the same site.
  • Introducing penalties for failure to provide an Owner Driver with the information booklet, rate and cost schedule, written contract and either with the appropriate notice of termination or the specific minimum payment in lieu thereof. 
  • Establishing an enforcement and compliance framework that will include a system that regulates infringement notices and court-imposed penalties for non-compliance with certain provisions of the Act. 
  • Giving authorised investigations officers the power to enter premises with consent and require hirers to produce documents relevant to an investigation.


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