CONCERNS expressed, especially by owner-drivers, about the impact of the ‘Contractor Driver Minimum Payments’ order, passed by the Road Safety Remuneration Tribunal in December last year has had the desired effect.
Last Friday, April 1, the Federal Court of Australia ordered that the introduction of the new payments proposal should be stayed until further order of the Federal Court.
The Australian Livestock and Rural Transporters Association had petitioned the court saying affected parties have not had enough time to understand and adjust to the new requirements.
If you take the views of several cattle transport operators at the Leongatha VLE Saleyards last Wednesday, before the order was handed down, many simply weren’t aware of the wide-sweeping nature of the changes.
Danny Payne, a subcontractor to his father’s livestock carrying business, Paynes Transport, had taken a brief look at the proposal but the more he read, the more he was concerned.
“I don’t think many people know too much about it,” he said.
“Among other things, the new system of payment would require owner-drivers to charge fixed minimum rates to all hirers regardless of existing contracts or market rates.”
He said an owner-driver would be required to charge a full rate to a hirer, regardless of whether they were carrying a part load.
If there are multiple hirers on the same load, an owner-driver would be required to charge each hirer the full rate, effectively multiplying the charge by the number of hirers, and potentially pricing an owner-driver out of the market.
One of the other owner drivers at the cattle sales said he believed the changes could put many of the nation’s 40,000 owner-drivers out of business as they strongly favoured the bigger transport operators.
Livestock and Rural Transporters Association of SA president David Smith offered an explanation.
“Say a subcontractor has got three different owners of livestock on a truck, which happens every day,” Mr Smith said.
“Under the order we have to actually charge, in this case with three owners on the truck, three different lots of minimum rate.
“Potentially you’ve just multiplied the cost of your stock by a ridiculous amount.
“There is no provision in the order anywhere. Effectively you’d have to charge the minimum rate for every owner on the truck. You might have six, you might have two, you have to charge each one.”
Company trucks driven by employees were not going to be subject to the order, meaning they are able to charge by load, reducing the cost significantly to the hirer and providing a much cheaper option.
In other words, truck firms that employed drivers would get a significant advantage.
The order also stipulates that fixed minimum rates must be paid for each kilometre an hour, a requirement that reduces an owner-driver’s ability to provide quotes to potential hirers.
“There’s no doubt in my mind that it (the order) will actually increase the cost and it’ll reduce flexibility quite markedly,” Mr Smith said.
“It’ll certainly be a whole different way of business. We won’t just be able to approach anyone at a market and get them to cart your livestock and we’ll tend to use company-driven trucks well before an owner-driver.”
“Owner drivers are going to miss out on work.”
The changes, which were actually designed to provide safer working conditions, including reasonable operating hours for drivers, by ensuring rates could not be cut below sustainable levels were due to come into effect on April 4.
The Federal Court ruling throws arrangements up into the air, hopefully time enough at least for all transport operators to get familiar with the impact.