THE ROAD SAFETY REMUNERATION ORDER: HOW DOES IT AFFECT YOU?

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1 THE ROAD SAFETY REMUNERATION ORDER: HOW DOES IT AFFECT YOU? Experts make thin

2 INDEX 1. THE ROAD SAFETY REMUNERATION ORDER: HOW DOES IT AFFECT YOU? DOES THE RSR ORDER APPLY TO YOU? YOU ARE AN EMPLOYER OF A DRIVER: WHAT MUST YOU DO? YOU ARE A HIRER (PRINCIPAL CONTRACTOR) WHO ENGAGES OWNER DRIVERS: WHAT MUST YOU DO? YOU ARE A CONSIGNOR OF GOODS: WHAT MUST YOU DO? YOU ARE AN INTERMEDIARY: WHAT MUST YOU DO? YOU ARE AN OPERATOR OF PREMISES FOR LOADING AND UNLOADING: WHAT MUST YOU DO? YOU ARE A CONSIGNEE OF GOODS: WHAT MUST YOU DO? FREQUENTLY ASKED QUESTIONS AUSTRALIAN BUSINESS LAWYERS & ADVISORS Neither this document nor the contents of this document may be reproduced without the prior written permission of Australian Business Lawyers & Advisors. Disclaimer: The information contained in this document is not legal advice. If a legal opinion is sought please contact your legal advisor. While all due care has been taken in the preparation of this information, it is believed to be accurate but no warranty of accuracy or reliability is given and no liability is accepted for errors or omissions or loss or damage suffered as a result of a person acting in reliance thereon. 1

3 SECTION 1 THE ROAD SAFETY REMUNERATION ORDER: HOW DOES IT AFFECT YOU?

4 1. THE ROAD SAFETY REMUNERATION ORDER: HOW DOES IT AFFECT YOU? 1.1 Introduction On 17 December 2013, the Road Safety Remuneration Tribunal (RSRT) made its first road safety remuneration order entitled the Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 (RSR Order). The RSR Order will likely have significant implications for many participants in the transport industry supply chain. 1.2 When does it start? The RSR Order takes effect from 1 May Key aspects of the RSR Order Whilst the name Road Safety Remuneration Order suggests that the RSR Order should deal with rates of pay and remuneration, importantly, this RSR Order does not deal with remuneration or set out any minimum rates of pay at all. The RSR Order does, however, impose a variety of other obligations relating to: (c) (d) (e) (f) (g) (h) (i) Written driver contracts; Supply chain contracts; Safe Driving Plans; WHS training; Drug & Alcohol policies; Drug & Alcohol training; Terms of payment; Record keeping requirements; and Whistleblower protections. These issues are explored in detail in this document. 1.4 Recommended steps If you are involved in the road transport industry or any part of the supply chain, you should: Step 1 Determine whether or not the RSR Order applies to you - refer to Section 2. Step 2 Determine whether or not you are an employer, a hirer, a consignor, a consignee, an operator of premises for loading and unloading, or an intermediary within a supply chain (you may be one or more of these). Step 3 Consider the separate and different obligations imposed on these participants in the supply chain - refer to Sections 3-8. Step 4 Review your existing systems and processes against the new requirements imposed by the RSR Order. Step 5 Contact our Road Safety Remuneration Team for any required assistance. 3

5 1.5 ABLA s Road Safety Remuneration Team Should you wish to discuss the RSR Order or its effect on your operations, please contact our Road Safety Remuneration Team: Nigel Ward CEO + Director Tel: Mobile: nigel.ward@ablawyers.com.au Luis Izzo Special Counsel Tel: Mobile: luis.izzo@ablawyers.com.au Kyle Scott Lawyer Tel: Mobile: kyle.scott@ablawyers.com.au 4

6 SECTION 2 DOES THE RSR ORDER APPLY TO YOU? 5

7 2. DOES THE RSR ORDER APPLY TO YOU? 2.1 What type of transport operations does the RSR Order cover? The RSR Order imposes requirements on numerous participants in the supply chain only in respect to the following types of transport operations: parts of the road transport and distribution industry in respect of the provision of a road transport service wholly or substantially in relation to goods or things that are destined for sale or hire by a supermarket chain; and long distance operations in the private transport industry. 2.2 Destined for sale or hire by a supermarket chain The RSR Order does not define what is meant by the phrase destined for sale or hire by a supermarket chain. It is expected that this uncertainty may cause issues for certain operators, as it may be difficult for drivers or other participants in the supply chain to work out whether or not a particular job involves transporting goods or things that are destined for sale or hire by a supermarket chain. The use of that phrase, and the lack of any definition or guidance on how it is to be interpreted, raises a number of important issues that need to be considered and resolved in order for participants in the supply chain to properly understand how the RSR Order will impact on their operations. What is a supermarket? A supermarket is defined by the Macquarie Dictionary to be: A large, usually self-service, retail store or market selling food and other domestic goods. There are some obvious examples that fit within this definition, including Coles, Woolworths, IGA etc. However, there will also be other examples that are less clear. At this time, until the meaning of supermarket in the RSR Order is tested in a court or tribunal, we recommend adopting the above Dictionary definition. What is a chain? A supermarket chain is defined in the RSR Order as 5 or more supermarkets. Again, most of the well-known supermarket brands would fall into this category. There may, however, be some smaller State-based supermarket brands where the number of supermarkets operated is less clear. Is the term destined intended to only capture primary freight? Again, the Macquarie Dictionary defines destined as: bound for a certain destination This definition introduces the idea of knowledge before the transport task is undertaken so again, until a court or tribunal expresses a view on this, we recommend interpreting the RSR Order as only capturing freight of finished items to the supermarket directly or to a distribution centre operated for the supermarket. We have set out some examples of these issues below. 6

8 2.3 Illustrative Example: The journey of a corn cob To demonstrate some of the potential complexities with the operation of the RSR Order, we examine the following scenario which involves the distribution of corn cobs along three different supply chain lines from the farm to the supermarket Journey 1 The first journey is signified by the green arrows. It shows the corn cobs being transported from the farm to the mill, where the corn is mixed with other farmers corn. The corn is then taken to the cannery where it is processed and packaged into tins before being taken to the distribution centre for storage before ultimately being transported to the supermarket. In this scenario, the first parts of the supply chain will not be captured by the RSR Order. This is because the original corn cobs are not actually destined for sale by a supermarket. It is only the tinned corn that is destined for sale by a supermarket. Therefore, the point at which the RSR Order comes into effect is when the tinned corn is transported from the cannery. So in this scenario, the RSR Order will apply to: (c) (d) (e) the cannery as the consignor (number 5 in the diagram); the distribution warehouse as an intermediary (number 7 in the diagram); the supermarket as the consignee (number 13 in the diagram); the drivers of the trucks (at numbers 6 and 8); and the employers or principal contractors of those drivers. 7

9 Journey 2 The second journey is signified by the red arrows. It shows the corn cobs being delivered directly from the farm to the supermarket. The corn cobs are not altered in any way and are sold by the supermarket as raw produce. In this scenario, it is clear that the corn cobs are destined for sale in a supermarket chain, and this should be obvious to all of the participants in the supply chain. Therefore, the entire supply chain will be captured by the RSR Order as follows: (c) (d) Journey 3 the corn farm as the consignor (number 1 in the diagram); the supermarket as the consignee (number 13 in the diagram); the driver of the truck (at number 9); and the employer or principal contractor of that driver. The third journey is signified by the blue arrows. This journey shows the corn cobs being transported to the processing plant where the raw corn is processed, mixed with other ingredients and turned into soup. The soup is then tinned before being transported to the supermarket. In this scenario, the first parts of the supply chain will not be captured by the RSR Order. This is because the original corn cobs are not actually destined for sale by a supermarket. It is only the tinned soup that is destined for sale by a supermarket. Therefore, the point at which the RSR Order comes into effect is when the corn soup tins leave the processing plant. So in this scenario, the RSR Order will apply to: (c) (d) Conclusion the processing plant as the consignor (number 11 in the diagram); the supermarket as the consignee (number 13 in the diagram); the driver of the truck (at number 12); and the employer or principal contractor of that driver. Participants in the supply chain will need to carefully consider the question of whether a good is destined for sale or hire by a supermarket chain when involved in the transportation of that good, and ultimately reach a view as to whether the RSR Order will apply to the particular transport operation being undertaken. This may be quite a complicated exercise at times and will likely involve individual drivers and other participants in the supply chain making inquiries as to: (c) what it is that they are transporting; whether the goods are destined for sale or hire in a supermarket; and if so, whether the supermarket is part of a supermarket chain. 8

10 2.4 Long distance operations The meaning of long distance operations is relatively clear. It is defined as any: return journey exceeding 500 kilometres; or interstate operation for which any single journey exceeds 200 kilometres, which involves moving livestock or materials whether in a raw or manufactured state. Livestock includes horses, cattle, sheep, pigs, goats or poultry. Interstate: single journey > 200km 4 2 Return journey < 500km 1 Return journey > 500km Interstate: each single journey < 200km 5 3 Multiple journeys, but no return journey > 500km The diagram above demonstrates the types of long distance operations that will be captured by the RSR Order. Operation 1 is a one-way trip of more than 250km and returning to the principal place of commencement. This operation is covered by the RSR Order because it is a return journey exceeding 500km. In contrast, Operation 2 is a one-way trip of less than 250km and returning to the principal place of commencement. It is not covered by the RSR Order because it is a return journey of less than 500km. Operation 3 involves multiple journeys to and from a principal point of commencement to a destination point 100km away (i.e. making multiple trips carting materials from a construction site to the tip). In this scenario, the driver may make 5 return trips in a day (totalling 1000km), but each of the return journeys is only 200km. Therefore, the RSR Order will not apply to this operation as it is not a return journey exceeding 500km. 9

11 Operation 4 is an interstate journey from a point of commencement in NSW to a point of destination in Queensland that is more than 200km away (and return). The operation is covered by the RSR Order because it involves a single interstate journey in excess of 200 km. Operation 5 involves a driver commencing in NSW, travelling to two sites in Victoria, and then returning to NSW. Although it is an interstate journey, it is not covered by the RSR Order because no single journey exceeded 200km. 2.5 Who does the RSR Order apply to? Assuming you are captured by the reference to long distance operations and/or operations involving the transport of goods or things that are destined for sale or hire by a supermarket chain, the RSR Order will apply to: Drivers (including employee drivers and owner-drivers 1 ); (c) (d) (e) (f) (g) Employers of drivers; Principal contractors who engage owner-drivers; Consignors; Consignees; Intermediaries; and Operators of premises for loading and unloading. 2.6 The RSR Order affects most participants in the Supply Chain The RSR Order applies to most participants in the supply chain, from the consignor all the way through to the consignee who receives the goods at the end of the supply chain. All drivers (whether employee drivers or owner-drivers), employers of the drivers, principal contractors who engage owner-drivers, consignees, consignors, intermediaries and operators of premises are caught by the RSR Order (or parts of it). 1 Other terms used to describe owner-drivers in Australia include lorry owner drivers, carters and owner-operators. For consistency, the term owner-drivers is used throughout this document. 10

12 Supermarket Consignor Operator of premises for loading and unloading Intermediary Consignee The above diagram provides an illustrative example of a relatively common supply chain, whereby goods are collected from a farm or manufacturing site, taken to a distribution centre or depot for loading, delivered to a warehouse for storage, and then finally delivered to a supermarket chain or other consignee. However, the supply chain may not always be quite so elaborate. For example, it may be as simple as a truck collecting goods from the consignor and transporting them directly to the consignee. Alternatively, the supply chain may be extremely sophisticated and involve various intermediaries along the chain. 11

13 SECTION 3 YOU ARE AN EMPLOYER OF A DRIVER: WHAT MUST YOU DO? 12

14 3. YOU ARE AN EMPLOYER OF A DRIVER: WHAT MUST YOU DO? 3.1 Who is an employer? You are an employer if you are a constitutional corporation, the Commonwealth or Territory (or a Commonwealth or Territory authority) and you employ one or more individuals who engage in the road transport industry by driving a vehicle to transport things by road. Sole traders, partnerships and other unincorporated entities that employ drivers are not covered by the RSR Order. 3.2 Employers must provide Drivers with Written Contracts Employers are required to provide road transport drivers with a written employment contract prior to employing them. This obligation only applies to employee drivers who are employed on or after 1 May For employees who commence prior to 1 May 2014, the obligation will not apply (although it is useful to have a written employment contract with all employees). For employees who are employed on or after 1 May 2014, their written employment contract must include: the names and contact details of the parties; the nature of the service to be provided by the driver; This could be as simple as driving vehicles or could be more detailed and include such things as the type of goods that are being transported, where they are being transported, and other important details regarding the service. (c) the nature of the legal relationship between the parties; This is likely to be implicit in the way in which any employment contract is constructed. However, for abundant caution, this obligation could be met by the employment contract stating something like You are an employee of [Company X]. (d) the period of the contract; The contract should specify whether it is for a fixed-term duration or an ongoing duration, and whether it is subject to termination for performance or other reasons upon the provision of a specified period of notice. Most employment contracts are ongoing subject to the usual termination provisions, and it is likely that the language used in your existing employment contracts will be sufficient. (e) any modern award, enterprise agreement or other industrial instrument that covers or applies to the driver; Employers will be required to investigate which, if any, industrial instrument applies to the driver and specify as such in the employment contract. It is very important to draft this clause carefully so that it does not incorporate any industrial instrument into the contract by reference. (f) the remuneration to be paid to the driver, including any wage rate or kilometre rate or other piece rate; 13

15 (g) any guaranteed minimum income or minimum number of hours of work (if applicable); This is unlikely to be relevant to employees, but may be relevant to owner-drivers which are discussed in Section 4. (h) a mechanism for at least annual review of remuneration; The employment contract must contain a clause that requires employers to review their employed drivers remuneration at least annually. As a result of that requirement, employers will then be contractually bound to review drivers remuneration at least annually. However, there is no obligation to increase remuneration as a result of any annual review. It is important to draft these provisions with care to ensure that no increase may automatically arise from such a review. A clause of this type that is poorly drafted may be held to mean that some increase in remuneration is guaranteed. If an enterprise agreement applies which deals with this we recommend a simple clause referencing this. (i) a mechanism for adjustment of remuneration (if agreed); If the parties agree on a particular method for adjusting remuneration, details of that mechanism and how it will be calculated must be included in the employment contract. By way of example, if the parties agree on a 3% increase per annum over 3 years, that agreement must be stated in the employment contract. However, this only applies if the parties have reached such an agreement. Where no agreement on future pay rises has been agreed, this part will not apply. Importantly, employers are not obliged to reach agreement with employees on this matter. Further, the RSR Order does not specify what type of mechanism should be used for the adjustment of remuneration. This gives employers freedom to negotiate with employee drivers on the mechanism that will be used (if they choose to do so). (j) details of any deductions or payments that the employer can seek from the driver; Employers need to ensure that they comply with the requirements of the Fair Work Act in relation to making deductions. Section 324 of the Fair Work Act provides very limited scope for employers to make deductions from amounts payable to employees. (k) (l) (m) a process for the driver to provide a copy of their driver history report from the relevant State or Territory driver licensing authority to the employer annually; a requirement that the driver notify the employer immediately of any suspension or cancellation of their driving licence; a notice of termination clause containing the relevant notice period and the circumstances in which the contract may be terminated without notice (and a requirement that notice be given in writing); The RSR Order does not contain any minimum notice periods. Therefore, employers are free to determine or negotiate a notice period with each employee driver, subject to the relevant applicable statutory minimum notice period, which will be set out either in the Fair Work Act or in an applicable modern award, enterprise agreement or other industrial instrument. (n) a clause providing that the employer will not direct the driver to commit any unlawful act. 14

16 3.3 Employers must keep records of Written Contracts for 7 years Employers must keep copies of all Written Contracts (i.e. employment contracts) for a period of seven years commencing from the termination of the employment contract. This requirement accords with most other employer obligations regarding keeping employment records for 7 years (for example, as per obligations regarding employee records in the Fair Work Act). 3.4 Employers must provide WHS Training Employers are required to take all reasonable measures to ensure drivers employed by them are trained in work health and safety (WHS) systems and procedures relevant to their job. Employers must also cover the costs reasonably incurred by drivers in undertaking such training. Employers should firstly review their existing WHS systems and procedures to ensure they are up-to-date and cover off all relevant aspects of WHS regulation. Where employers already have existing WHS training programs in place, they should review the training programs to ensure that the training material is relevant to the jobs of employee drivers. Where employers do not have WHS training programs in place, they will need to implement such training programs. While the RSR Order does not specify how often WHS training should be undertaken, employers should ensure that all new drivers receive training either as part of their induction or, if not as part of the induction, within a reasonable time of that driver commencing work with the business. 3.5 Employers must implement a Drug & Alcohol Policy Employers are required to implement a written Drug & Alcohol Policy in consultation with drivers. The policy must apply to all drivers to which the RSR Order applies to. Although it is not entirely clear from the RSR Order, it is our view that employers are not required to implement a new Drug & Alcohol Policy if they already have one in place which meets the content requirements of the RSR Order. While the RSR Order uses the phrase policy, what is required is more often contained in a programme operating under a policy. Drug & Alcohol policies must: (c) (d) (e) (f) expressly prohibit the use, consumption, possession, manufacture, sale, purchase or transfer of illegal drugs, or prescription and pharmacy drugs or alcohol while working or on site; include a fair and reasonable process for drivers to notify the employer of drug and alcohol dependency or abuse and require the employer to investigate and respond to any such notification; specify the drug and blood alcohol content levels that will constitute a breach of the policy; implement a fair system of mandatory drug and blood alcohol content testing in accordance with the relevant Australian standards; specify the procedure for the mandatory drug and blood alcohol content testing; specify the procedure that will apply if a driver fails a drug or alcohol test; and 15

17 (g) set out the consequences of a failed drug or alcohol test. Employers who do not have a Drug & Alcohol policy in place should implement one before 1 May Employers who have an existing Drug & Alcohol policy in place should audit their policy against these new requirements. Some employers have policies and programmes that relate to their whole workforce and not just drivers. In that case, they will need to carefully consider whether they should amend all of the programme, create separate parts of the programme to apply only to drivers, or have separate policies and programmes altogether for drivers and non-drivers. The RSR Order does not deal with the issue of saliva vs urine testing or on-site dipstick testing vs laboratory testing. Employers are therefore free to develop their programmes in this regard as they were prior to the RSR Order. 3.6 Employers must provide training on the Drug & Alcohol Policy Employers must take all reasonable steps to ensure drivers receive training on the Drug & Alcohol Policy. Employers must also cover the costs reasonably incurred by drivers in undertaking such training. The RSR Order does not set out any specific requirements such as how the training is to be provided, how detailed it must be or what specific topics need to be covered. As with the WHS training, employers should ensure that all new drivers receive training on the Drug & Alcohol Policy either as part of their induction or, if not as part of the induction, within a reasonable time of that driver commencing work with the business. It will be important to ensure that drivers understand their rights and obligations and the key processes operating under any policy. 3.7 Employers must implement Safe Driving Plans (only if you undertake long distance operations using vehicles with a GVM of more than 4.5 tonnes) Employers are required to implement written Safe Driving Plans for each driver employed by them who undertakes a long distance operation using a vehicle with a GVM of more than 4.5 tonnes. Long distance operations are defined as any return journey exceeding 500 kilometres, or any interstate operation for which any single journey exceeds 200 kilometres, which involves moving livestock or materials whether in a raw or manufactured state (see the diagram at section 2.4 above). Safe Driving Plans must be made with each individual driver. In practice, where multiple drivers are employed to undertake the same driving operation, the Safe Driving Plans for each driver will most likely be identical (or largely identical). However, it is still a requirement that each driver have their own individual Safe Driving Plan. Safe Driving Plans must also be made in consultation with each relevant driver, although the RSR Order does not specify what level of consultation is required (for example, it does not set out any particular consultation process that must be followed). In the absence of any specific consultation requirements, employers must engage in at least some consultation with drivers when preparing and implementing Safe Driving Plans, however the employer will ultimately retain a level of managerial prerogative in terms of the final Safe Driving Plans. 16

18 Safe Driving Plans must also be tailored to the particular long distance operation being undertaken. For example, where there are two operations which involve different distances and time periods, the respective Safe Driving Plans relating to those operations will likely contain different fatigue and risk management plans. Safe Driving Plans must be reviewed and updated when there is any change to the nature of the operation or when safety issues warrant a review. This obligation will likely require employers to proactively monitor the ongoing appropriateness of each Safe Driving Plan. This obligation is in addition to the obligation set out at point 3.8 below. Safe Driving Plans must include the following details: (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) names and addresses of the employer, employee and all known participants in the supply chain in relation to the road transport service to be provided; the period covered by the safe driving plan; all pick-up and delivery locations in relation to the road transport service; the registration number, make and model of the vehicle/s used; the type of Fatigue Risk Management System the driver is operating under; a section for drivers to declare, prior to each departure, whether they: (i) (ii) (iii) (iv) hold a current driver s licence for the class of vehicle(s); are fit to provide the road transport service; have received WHS training from the employer; and have inspected the vehicle(s) and rectified or had rectified any defects; a travel plan detailing the anticipated timeframes and distances for each leg or stage involved in the service, including when breaks are to be taken; details of potential risks such as fatigue, vehicle fitness, speed, communication, fauna, vegetation, weather and visibility, and the means of lessening the risks; instructions about how the driver is to inform the employer of circumstances which make compliance with the Safe Driving Plan impracticable; instructions regarding managing fatigue, including scope for the driver to amend the Safe Driving Plan to include additional rest breaks where necessary to ensure the safe completion of the service; a section for the driver to sign-off on the completed Safe Driving Plan at the conclusion of the service; and a requirement that the driver return the completed and signed Safe Driving Plan to their employer within 48 hours of the completion of the service. Where employers do not use real-time electronic tracking to record departure and arrival times and distances travelled, the Safe Driving Plan must also include a section for the driver to record departure and arrival times (including from each pickup and delivery location) and timeframes and distances travelled. Where practicable, these entries also need to be witnessed by the relevant participant in the supply chain when in the presence of the driver (i.e. the consignee, consignor, intermediary, etc.). 17

19 Safe Driving Plans are a relatively common feature in the long distance field already, and if they are currently in use you will need to audit the current driving plan template against the new requirements to ensure compliance. Real time systems A large number of companies currently operate sophisticated GPS-based real-time monitoring systems for managing fatigue. It is likely that these systems will largely cover the new requirements of the RSR Order. However, operators should not simply assume this. They should audit the system against the new requirements. 3.8 Employers must review completed Safe Driving Plans Employers must regularly review completed Safe Driving Plans to identify any safety issues arising from the service and any opportunities to improve the safety of the service. The RSR Order does not provide any specific timeframe regarding how often completed Safe Driving Plans will need to be reviewed, other than the general obligation to review them regularly. This will likely mean that employers will need to introduce a system of periodic review of all Safe Driving Plans that are completed within a particular period of time (for example, a quarterly review of all Safe Driving Plans completed that quarter). 3.9 Employers must keep records of Safe Driving Plans for 7 years Employers must keep copies of all Safe Driving Plans (and any associated electronic records) for a period of seven years from the completion of the Safe Driving Plan. Completed Safe Driving Plans and associated electronic records must also be made available to the relevant driver upon request. 18

20 SECTION 4 YOU ARE A HIRER (PRINCIPAL CONTRACTOR) WHO ENGAGES OWNER-DRIVERS: WHAT MUST YOU DO? 19

21 4. YOU ARE A HIRER (PRINCIPAL CONTRACTOR) WHO ENGAGES OWNER- DRIVERS: WHAT MUST YOU DO? 4.1 Who is a hirer? The RSR Order defines a hirer as the party to a road transport contract who is not the ownerdriver (in other words, the principal contractor). 4.2 Principal Contractors must provide Drivers with Written Contracts Hirers or principal contractors are required to provide road transport drivers with a written contract prior to engaging them. This obligation only applies to owner-drivers who are engaged by the principal contractor on or after 1 May For owner-drivers who are engaged prior to 1 May 2014, this obligation will not apply (although it is useful to have written contracts with all drivers you engage). For owner-drivers who are engaged on or after 1 May 2014, their written contract must include: (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) the names and contact details of the parties; the nature of the service to be provided by the driver; the nature of the legal relationship between the parties; the period of the contract; any industrial instrument that covers or applies to the driver; the remuneration to be paid to the driver, including any hourly rate or kilometre rate or other piece rate; any guaranteed minimum income or minimum number of hours of work (if applicable); a mechanism for at least annual review of remuneration; a mechanism for adjustment of remuneration (if agreed); details of any deductions or payments that the principal contractor can seek from the driver; a process for the driver to provide a copy of their driver history report from the relevant State or Territory driver licensing authority to the principal contractor annually; a requirement that the driver notify the principal contractor immediately of any suspension or cancellation of their driving licence; a notice of termination clause containing the relevant notice period and the circumstances in which the contract may be terminated without notice (and a requirement that notice be given in writing); a clause providing that the principal contractor will not direct the driver to commit any unlawful act. Principal contractors will be required to investigate whether there is any industrial instrument applying to the driver (such as any State-based industrial instrument, e.g. a NSW transport 20

22 industry Contract Determination) and specify as such in the contract. If there is, it must be stated in the contract. However, it is very important to draft this clause carefully so that it does not incorporate the industrial instrument into the contract by reference. 4.3 Principal contractors must keep records of Written Contracts for 7 years Principal contractors must keep copies of all Written Contracts (i.e. road transport contracts) for a period of seven years from the date of termination of the contract. 4.4 Principal contractors must pay drivers within 30 days of receipt of invoice Principal contractors must pay owner-drivers all undisputed amounts within 30 days of either: the date of receipt of a valid tax invoice given to the principal contractor by the ownerdriver; or the date of generation of a valid tax invoice by the principal contractor for the ownerdriver. Undisputed amounts include amounts required to be paid under the RSR Order as well as amounts required to be paid under the owner-driver s contract. The effect of this obligation may actually relax terms of payment for principal contractors who generate tax invoices for owner-drivers (i.e. a Recipient Created Tax Invoice), as it means that payment does not need to be made until 30 days after the generation of the tax invoice. In practice, it is not uncommon for principal contractors to pay owner-drivers on the same day the tax invoice is generated. Parties are not able to contract out of the requirement to pay within 30 days. For example, a provision contained in a road transport contract allowing for a longer time to pay will not be valid. 4.5 Restrictions on deductions for the provision of services or equipment Owner-drivers cannot be required to pay any amount, or to have any deduction made to any amount payable to them, in respect of the provision of any services or equipment by the principal contractor or anyone else, unless: (c) the particular services or equipment are set out in the road transport contract as a type of payment or type of deduction the principal contractor may seek payment or make deduction for; and the amounts are a direct and proper reflection of the actual cost of the services or equipment in respect of which the costs are charged; and if practicable, the principal contractor has given the owner-driver an opportunity to obtain the services or equipment from another supplier. Is fuel a service or equipment? A number of principal contractors make discounted fuel available to owner-drivers by way of a corporate fuel card. In our view, it is unlikely that the provision of a fuel card will be considered a service, but that will depend on the particular terms of the arrangement. 21

23 4.6 Restrictions on deductions for insurance Principal contractors cannot require an owner-driver to pay any amount, or have any amount deducted from an amount payable to an owner-driver, in respect of insurance unless: (c) the insurance is set out in the road transport contract as a type of payment or type of deduction the principal contractor may seek payment or make deduction for; and an insurance policy is in force; and the principal contractor has provided a copy of the policy to the owner-driver. 4.7 Restrictions on other deductions Principal contractors cannot otherwise require an owner-driver to pay any amount, or make any deductions from an amount payable to an owner-driver, unless specifically permitted by Commonwealth, State or Territory legislation as in force on 17 December This means that, other than the provision of services or equipment or insurance, a road transport contract cannot provide for other deductions unless such an arrangement or deduction is expressly permitted by legislation as in force at the time the RSR Order was made. 4.8 Principal contractors must provide WHS Training Principal contractors are required to take all reasonable measures to ensure owner-drivers engaged by them are trained in work health and safety (WHS) systems and procedures relevant to their job. Principal contractors must also cover the costs reasonably incurred by drivers in undertaking such training. Principal contractors should firstly review their existing WHS systems and procedures to ensure they are up-to-date and cover off all relevant aspects of WHS regulation. Where principal contractors already have existing WHS training programs in place, they should review the training programs to ensure that the training material is relevant to the jobs of road transport drivers. Where principal contractors do not have WHS training programs in place, they will need to implement such training programs. While the RSR Order does not specify how often WHS training should be undertaken, principal contractors should ensure that all new owner-drivers covered by the RSR Order receive training either as part of their induction or, if not as part of the induction, within a reasonable time of that driver commencing work with the business. 4.9 Principal contractors must implement a Drug & Alcohol Policy Principal contractors are required to implement a written Drug & Alcohol Policy in consultation with drivers. The policy must apply to all drivers to which the RSR Order applies to. Although it is not entirely clear from the RSR Order, it is our view that principal contractors are not required to implement a new Drug & Alcohol Policy if they already have one in place which meets the content requirements of the RSR Order. While the RSR Order uses the phrase policy, what is required is more often contained in a programme operating under a policy. 22

24 Drug & Alcohol policies must: (c) (d) (e) (f) (g) expressly prohibit the use, consumption, possession, manufacture, sale, purchase or transfer of illegal drugs, or prescription and pharmacy drugs or alcohol while working or on site; include a fair and reasonable process for drivers to notify the principal contractor of drug and alcohol dependency or abuse and require the principal contractor to investigate and respond to any such notification; specify the drug and blood alcohol content levels that will constitute a breach of the policy; implement a fair system of mandatory drug and blood alcohol content testing in accordance with the relevant Australian standards; specify the procedure for the mandatory drug and blood alcohol content testing; specify the procedure that will apply if a driver fails a drug or alcohol test; and set out the consequences of a failed drug or alcohol test. Principal contractors who do not have a Drug & Alcohol policy in place should implement one before 1 May Principal contractors who do have an existing Drug & Alcohol policy in place should audit their policy against these new requirements. Some principal contractors will have policies and programmes that relate to their whole workforce and not just drivers. In that case, they will need to carefully consider whether they should amend all of the programme, create separate parts of the programme to apply only to drivers, or have separate policies and programmes altogether for drivers and non-drivers. The RSR Order does not deal with the issue of saliva vs urine testing or on-site dipstick testing vs laboratory testing. Principal contractors are therefore free to develop their programmes in this regard as they were prior to the RSR Order Principal contractors must provide training on the Drug & Alcohol Policy Principal contractors must take all reasonable steps to ensure drivers receive training on the Drug & Alcohol Policy. Principal contractors must also cover the costs reasonably incurred by drivers in undertaking such training. The RSR Order does not set out any specific requirements such as how the training is to be provided, how detailed it must be or what specific topics need to be covered. As with the WHS training, principal contractors should ensure that all new drivers receive training on the Drug & Alcohol Policy either as part of their induction or, if not as part of the induction, within a reasonable time of that driver commencing work with the business. It will be important to ensure that drivers understand their rights and obligations and the key processes operating under any policy. 23

25 4.11 Principal contractors must implement Safe Driving Plans (only if owner-drivers engaged by them undertake long distance operations using vehicles with a GVM of more than 4.5 tonnes) Principal contractors are required to implement written Safe Driving Plans for each driver engaged by them who undertakes a long distance operation using a vehicle with a GVM of more than 4.5 tonnes. Long distance operations are defined as any return journey exceeding 500 kilometres, or any interstate operation for which any single journey exceeds 200 kilometres, which involves moving livestock or materials whether in a raw or manufactured state (see the diagram at section 2.4 above). Safe Driving Plans must be made with each individual driver. In practice, where multiple drivers are engaged to undertake the same driving operation, the Safe Driving Plans for each driver will most likely be identical (or largely identical). However, it is still a requirement that each driver have their own individual Safe Driving Plan. Safe Driving Plans must also be made in consultation with each relevant driver, although the RSR Order does not specify what level of consultation is required (for example, it does not set out any particular consultation process that must be followed). Safe Driving Plans must be tailored to the particular long distance operation being undertaken. For example, where there are two operations which involve different distances and time periods, the respective Safe Driving Plans relating to those operations will likely contain different fatigue and risk management plans. Safe Driving Plans must also be reviewed and updated when there is any change to the nature of the operation or when safety issues warrant a review. This obligation will likely require principal contractors to proactively monitor the ongoing appropriateness of each Safe Driving Plan. This obligation is in addition to the obligation set out at point 4.12 below. Safe Driving Plans must include the following details: (c) (d) (e) (f) (g) names and addresses of the principal contractor, owner-driver and all known participants in the supply chain in relation to the road transport service to be provided; the period covered by the safe driving plan; all pick-up and delivery locations in relation to the road transport service; the registration number, make and model of the vehicle/s used; the type of Fatigue Risk Management System the driver is operating under; a section for drivers to declare, prior to each departure, whether they: (i) (ii) (iii) (iv) hold a current driver s licence for the class of vehicle(s); are fit to provide the road transport service; have received WHS training from the principal contractor; and have inspected the vehicle(s) and rectified or had rectified any defects; a travel plan detailing the anticipated timeframes and distances for each leg or stage involved in the service, including when breaks are to be taken; 24

26 (h) (i) (j) (k) (l) details of potential risks such as fatigue, vehicle fitness, speed, communication, fauna, vegetation, weather and visibility, and the means of lessening the risks; instructions about how the driver is to inform the principal contractor of circumstances which make compliance with the Safe Driving Plan impracticable; instructions regarding managing fatigue, including scope for the driver to amend the Safe Driving Plan to include additional rest breaks where necessary to ensure the safe completion of the service; a section for the driver to sign-off on the completed Safe Driving Plan at the conclusion of the service; and a requirement that the driver return the completed and signed Safe Driving Plan to the principal contractor within 48 hours of the completion of the service. Where principal contractors do not use real-time electronic tracking to record departure and arrival times and distances travelled, the Safe Driving Plan must also include a section for the driver to record departure and arrival times (including from each pickup and delivery location) and timeframes and distances travelled. Where practicable, these entries also need to be witnessed by the relevant participant in the supply chain when in the presence of the driver (i.e. the consignee, consignor, intermediary, etc.). Safe Driving Plans are a relatively common feature in the long distance field already, and if they are currently in use you will need to audit the current driving plan template against the new requirements to ensure compliance. Real time systems A large number of companies currently operate sophisticated GPS-based real-time monitoring systems for managing fatigue. It is likely that these systems will largely cover the new requirements of the RSR Order. However, operators should not simply assume that. They should audit the system against the new requirements Principal contractors must review completed Safe Driving Plans Principal contractors must regularly review completed Safe Driving Plans to identify any safety issues arising from the service and any opportunities to improve the safety of the service. The RSR Order does not provide any specific timeframe regarding how often completed Safe Driving Plans will need to be reviewed, other than the general obligation to review them regularly. This will likely mean that principal contractors will need to introduce a system of periodic review of all Safe Driving Plans that are completed within a particular period of time (for example, a quarterly review of all Safe Driving Plans completed that quarter) Principal contractors must keep records of Safe Driving Plans for 7 years Principal contractors must keep copies of all Safe Driving Plans (and any associated electronic records) for a period of seven years from the completion of the Safe Driving Plan. Completed Safe Driving Plans and associated electronic records must also be made available to the relevant driver upon request. 25

27 SECTION 5 YOU ARE A CONSIGNOR OF GOODS: WHAT MUST YOU DO? 26

28 5. YOU ARE A CONSIGNOR OF GOODS: WHAT MUST YOU DO? 5.1 Who is a consignor? You are a consignor if you are a sender of a thing in respect of which a road transport driver (within the meaning and coverage of the RSR Order) is providing road transport services. However, in order for the RSR Order to apply to a consignor, the consignor must have a relevant constitutional connection. This is due to the Commonwealth government having only limited powers under the Australian Constitution to regulate certain matters. In order to be a consignor, you must be one of the following: (c) (d) (e) (f) (g) (h) a constitutional corporation ; or the Commonwealth or a Territory (or a Commonwealth or Territory authority); or an individual who is a resident of a Territory; or a body corporate that has its principal place of business in a Territory; or a consignor for the purposes of a business undertaking of a constitutional corporation; or a consignor for the purposes of the Commonwealth or Territory (or a Commonwealth or Territory authority); a consignor in the course of or in relation to constitutional trade or commerce ; or a corporation that was the consignor of a thing for the purposes of the business of that corporation. The term constitutional corporation captures almost all corporations, except for certain charitable organisations. The phrase constitutional trade or commerce means trade or commerce among the States, between a State and a Territory, between two Territories, within a Territory, or between Australia and a place outside Australia. While the definition of consignor is unhelpfully complex, the reality is that most consignors will fall within the definition so long as they are incorporated entities. However, certain sole traders and partnerships that operate as consignors may not be caught by the definition. 5.2 Consignors must ensure Supply Chain Contracts are consistent with the RSR Order A consignor must take all reasonable measures to ensure that any contract it has with another participant in the supply chain contains provisions which are relevantly consistent with the requirements of the RSR Order. Consignors must therefore review all contracts they have with other participants in the supply chain to ensure those contracts do not contain provisions which are inconsistent with the requirements of the RSR Order (e.g. contracts which prevent or make it difficult for drivers to comply with their obligations under the RSR Order). This obligation is not limited to written contracts. It will also apply to unwritten verbal or oral contracts. Many consignment arrangements are not written but oral, and a consignor would need to be careful that there was no oral representation or agreement that is inconsistent with the RSR Order. 27

29 Where a term of a supply chain contract is not relevantly consistent with a term of the RSR Order, the consignor must take reasonable measures to rectify the inconsistency. This may include consulting with other parties to the contract and seeking to vary the contract. It is unlikely that consignors will want to fundamentally change their existing arrangements. If that is the case, a couple of ways of dealing with this issue could be to: include a clause into all existing supply chain contracts which states that the parties to the contract must comply with the requirements of the RSR Order; or include a clause into all existing supply chain contracts which states that, where any clause of the contract which is relevantly inconsistent with a term of the RSR Order, the clause of the contract is null and void and the term of the RSR Order will apply. The RSR Order does not provide any guidance around what will be considered relevantly consistent. Obviously, a provision will contravene this requirement where it is directly inconsistent with a provision of a road transport contract. However, there may be a grey area where a provision in a supply chain contract is similar, but not identical, to a corresponding provision contained in a road transport contract. 5.3 Consignors must witness entries in Safe Driving Plans (where required) Where a driver is recording the time of departure or arrival in a Safe Driving Plan, a consignor is required, where practicable, to witness the recording of that time by signing next to that entry in the Safe Driving Plan. The phrase where practicable is different to the phrase where possible and introduces concepts of day-to-day operational practicability. Therefore, the consignor should not be required to materially change the nature of their operations to meet this requirement, given the use of the phrase where practicable. 5.4 Consignors must not take adverse conduct against a driver A consignor must not take adverse conduct against a road transport driver because the driver has a workplace entitlement, exercises or proposes to exercise a workplace entitlement, or in order to prevent the driver from exercising a workplace entitlement. A driver has a workplace entitlement were he/she has an entitlement to a benefit of, or a role or responsibility under, the Road Safety Remuneration Act 2012 (RSR Act) or the RSR Order, or is able to commence proceedings or make a complaint or inquiry under, or seek compliance with, the RSR Act. The phrase adverse conduct is defined broadly and includes taking any action which causes injury or detriment to the driver s position. 28