The Road Safety Remuneration Tribunal has issued its final Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 which mandates minimum rates of payment for ‘contractor drivers’ and imposes significant obligations on businesses that engage ‘contractor drivers’ directly or contract with a third party that engages ‘contractor drivers’.

Who is caught by the Order?

The Order only applies to services provided by a ‘contractor driver’ employed or engaged in:

  • distribution operations involving the transport of retail goods destined for sale or hire by a supermarket chain (a business operating five or more supermarkets); and
  • long distance operations within the meaning of the Road Transport (Long Distance Operations) Award 2010, which broadly covers interstate journeys exceeding 200 km or return journeys exceeding 500 km.

Summary of obligations imposed by the Order

Contractor drivers must be paid both minimum hourly rates, including pro-rata payments for any part of an hour spent providing services, and running costs per kilometre for any vehicle they supply.

The minimum rates are set out in a series of schedules to the Order and will automatically increase by 2% per year commencing on 4 April 2017.

The prescribed hourly rate must be paid ‘for each hour or part thereof that a contractor driver necessarily spends in providing road transport services’ and which include a long list of activities apart from driving, such as:

  • while the contractor driver is required by the hirer to be at its disposal or direction;
  • during rest periods required by law;
  • loading or unloading; and
  • cleaning, inspecting, servicing or repairing a vehicle or trailer supplied by the hirer.

The paid hours of work will run from when a driver reports for work until they arrive at the ultimate location where the goods are to be delivered.

If a hirer regularly engages a contractor driver over a 12 month period, the hirer must permit the contractor driver to take up to four weeks of unpaid leave during each 12 month period that follows.

Supply chain participants (consignors, consignees, intermediaries and operators of premises for loading or unloading) must take all reasonable steps to ensure that any contract they have with another party in the supply chain complies with the Order.

Hirers are also required to submit to annual compliance audits by a supply chain participant with which they contract unless the contract provides (or contracts collectively provide) for the carriage of goods on fewer than 270 days in a financial year.

If the auditing party believes that the Order has not been complied with, they may, in some circumstances, be required to notify the Fair Work Ombudsman of the suspected non-compliance.

What steps must you take before April 2016?

Before the Order comes into force on 4 April 2016, parties caught by the Order must:

  • in the case of transport operators, establish which subcontractors currently engaged are ‘contractor drivers’ who fall within the scope of the Order;
  • in the case of supply chain participants, determine whether any of its transport services providers engage ‘contractor drivers’ who fall within the scope of the Order;
  • review contracts with any ‘contractor drivers’ or with any party that engages ‘contractor drivers’ and determine the remuneration payable under the Order;
  • take steps to promote the Order to contractor drivers, and to display the Order on websites and in depots; and
  • become familiar with the new obligations imposed by the Order and ensure that current computer systems allow tracking of hours and kilometres travelled by ‘contractor drivers’ so as to calculate payments due to those drivers.

The terms of the Order are lengthy and complex. A more comprehensive bulletin discussing the terms of the Order is available by clicking here.