Australia’s largest transport carrier has joined the nation’s peak Logistics body to reject a government proposal to reform trucking pay
By Brad Gardner and Anna Game-Lopata | February 18, 2011
Australia’s largest transport and logistics carrier has joined the nation’s peak Logistics body to reject a government proposal aimed at reforming trucking remuneration.
The Australian Logistics Council (ALC) has expressed concern about the government’s Safe Rates Safe Roads Directions Paper to institute yet another layer of regulation upon the industry.
“The ALC submission calls for a clearer statement on why further statutory intervention is required and how it will introduce benefits not already likely to be achieved by other national and comprehensive laws dealing with safety issues,” says ALC Chief Executive Michael Kilgariff.
“ALC vehemently opposes the imposition of statutory provisions duplicating other obligations imposed by law that do not tangibly add to industry participant safety.
“The industry is currently subjected to an extremely complex regulatory environment under Federal, state/ territory and local governments,” he says.
“For this reason the industry supported a National Heavy Vehicle Regulator, which will include national Chain of Responsibility legislation.
“It also endorses the National Work Health & Safety (WHS) Act, which will impose a duty on transport and logistics participants to eliminate or minimise, so far as is reasonably practicable, health and safety risks,” Kilgariff says.
Meanwhile the Toll Group has finally adopted a position on safe rates, which the Federal Government says will ensure employees and owner-drivers are paid enough to make ends meet.
The transport and logistics giant claims owner-drivers will be worse off if a minimum rate is introduced.
A 2008 National Transport Commission (NTC) report found a link between low rates of pay and safety. It argued for a minimum rate to be set, but Toll claims government intervention is not the answer.
“We firmly believe the introduction of a new layer of regulation, in addition to the existing regulatory and non-regulatory mechanisms will challenge many smaller transport operators and owner-drivers,” it says.
Instead, Toll wants the voluntary National Logistics Council Safety Code used.
NATIONAL LOGISTICS COUNCIL CODE
An Allen Consulting Group report – paid for by Toll – says the code is effective because it addresses health and safety, scheduling, time slot management, loading practices and driver fatigue management.
According to Toll, the Government is proposing mechanisms “that will substantially increase costs along the supply chain and endanger the existence and livelihoods of owner-drivers”.
It says increased regulation will only increase compliance costs and render sub-contractors uncompetitive.
The ALC also argues for the adoption of
its Code.
“As acknowledged by the Directions Paper, a number of safety risks are beyond the scope of industry, such as road conditions and the behaviour of other road users,” Kilgariff points out.
“However, for those risks that do fall within the scope of industry control, numerous initiatives have been identified and introduced to ensure safety is a key consideration in decision making, in addition to commercial and industrial objectives.
“ALC has worked closely with its members to develop the National Logistics Safety Code and the Safe Payments Systems Statement.
“ALC is committed to further developing the Code with industry and the appropriate regulating bodies to increase its scope, as well as broaden its application.
According to Kilgariff, codes that focus on measurement and outcomes enable individual organisations to operate under their own business model while adopting a ‘reasonable steps’ approach to safety.
Kilgariff argues results to date of these initiatives, as well as significant investment in roads and new vehicles and technology, have been significant and should not be underestimated.
“Equally as important is that they have been broadly adopted and accepted as ‘part of doing business’,” he says.
ALC has recommended that a new tribunal should not be created nor should a new tribunal or existing tribunal have powers conferred on it to determine matters relating to owner drivers.
“A Regulatory Impact Statement and Cost Benefit Analysis must be provided that articulates the cost to industry involved in implementing the new scheme,” Kilgariff says.
“We need to understand why current statutory schemes are insufficient to protect worker safety, and the additional safety outcomes the proposed new mechanisms are expected to achieve over and above the safety improvements recognised in the paper,” he says.
TOLL CRITICISES SAFE RATES PAPER
Toll also criticises the Government’s Safe Rates, Safe Roads directions paper that argues the case for reform.
Toll claims the paper does not explain how rates will eliminate risky behaviour and that there is no strong argument to justify that remuneration reform will deliver additional safety benefits.
The paper draws on the work of the 2008 NTC report, which points out a wide body of literature supporting a link between rates of pay and safety.
It cites the work of Professor Ann Williamson, whose studies and surveys revealed incentive-based payments cause drivers to work longer hours or take stimulants.
Following extensive work with trucking companies in the US, Professor Michael Belzer found increases in pay reduced the risk of crashes.
The NTC also referenced coronial findings in NSW and South Australia that accepted links between safety and pay.
In its report, Allen Consulting Group says the Government assumes drivers will not speed or work longer to earn more money.
“However, the effectiveness of the regulations would depend on the risk preference of the driver. A risk-loving driver would respond to higher payment rates by driving longer hours, as s/he is willing to undertake more risk for greater economic return,” it says.
The NTC addresses the claim in its report, but says most drivers surveyed said they would not work long hours or use stimulants if they did not need to.
“The NTC does not believe that the potential for a minority to continue to engage in unsafe on-road behaviours, despite having a system of safe payments, is a sufficient reason to not attempt to improve the safety outcomes in the industry through such a framework,” its report says.
TRIBUNAL OPTION
The Government has proposed a tribunal to rule on pay matters, and has suggested establishing it within Fair Work Australia. Under one of the three proposals, the tribunal will be able to apply employee-like conditions to owner-drivers.
Toll believes a tribunal that treats owner-drivers similarly to employees will reduce the attractiveness of sub-contractors because there will be no distinction between them and company drivers.
“If the distinction between owner-driver and employee is lost, how attractive will owner-drivers continue to be to the companies who currently utilise them? Is the government prepared to see the jobs and livelihoods of these drivers disappear?” Toll asks.