The Order

On 26 August 2015, the Road Safety Remuneration Tribunal (the Tribunal) issued the draft Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 (the Draft RSRO)

The Draft RSRO proposes to set minimum pay rates (the Pay Rates) for road transport drivers covered by the Road Transport and Distribution Award 2010, relating to goods sold by supermarket chains, and the Road Transport (Long Distance Operations) Award 2010.

Submissions

In determining the Pay Rates, the Tribunal adopted a KPMG research report (the KPMG Report) on minimum payments for road transport drivers, which retailers and transport companies submit is based on erroneous assumptions about the road transport industry.

It has been argued that the assumptions inherent in the KPMG Report in relation to kilometres travelled and hours worked do not reflect current industry practice in the long distance or retail sectors. Furthermore, the assumptions made do not account for variations in respect of kilometres travelled, hours worked, fuel consumption and the cost of capital which arise in different sectors of the transport industry, and the size and type of the transport vehicle.

McCabes has argued in submissions to the Tribunal that the Draft RSRO should adopt different rates for local work, long distance work and regional work. McCabes submitted that these differences within the transport industry are fundamental as they go to the root of how a RSRO (if any) should be drafted. Our view is that the KPMG Report currently adopted by the Tribunal makes unrealistic assumptions that should not form the basis of determination of pay rates in the transport industry.

Way forward

The Draft RSRO has been made following a number of conferences which have sought to reach consensus in relation to whether a RSRO should be made and, if so, the terms of the RSRO. Unions, retailers and transport companies alike agreed that little progress was being made in the conferences. At the very least, the Draft RSRO will now provide a starting point from which constructive debate and progress may be achieved.

The Tribunal has emphasised that the draft Order is a "draft", and has invited written submissions on the Draft RSRO until midday on 23 September 2015. Further hearings will be held in October 2015.

Upon receiving submissions, the Tribunal may make any changes to the Draft RSRO it thinks appropriate, or may decide that no RSRO is to be made.