Summary

The end of last week saw the Road Safety Remuneration Tribunal make the decision to not vary the commencement of the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016. The effect of this decision would have meant that the controversial Order would commence operation on 4 April 2016.

However, this decision was immediately followed by a successful application to the Federal Court of Australia which has delayed the Order's effect, pending a hearing in the Court. Following the Federal Court stay, the Federal Government has now intervened, indicating that it proposes to introduce legislation into Parliament to delay the implementation of the Order.

This eBulletin summarises all the recent activity in relation to the Tribunal's Order.

Quick links

Recent developments in relation to the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016

On 1 April 2016, the Road Safety Remuneration Tribunal (RSRT) made the decision to not alter the commencement date of the Contractor Driver Minimum Payments Road Safety Remuneration Order 2016 (Remuneration Order) meaning that the Remuneration Order was due to come into effect from 4 April 2016.

However, following the RSRT's decision, the National Road Transportation Association (NRTA) successfully applied to the Federal Court of Australia for an order staying the commencement of the Remuneration Order, pending review by the Court.

Accordingly, the Remuneration Order has not yet commenced operation. The Federal Court has commenced hearing the NRTA's application today. The Application is supported by the Australian Industry Group and the Federal Government.

In a further development, over this last weekend the Transport Workers' Union has applied for an injunction to set aside the Federal Court's stay. The hearing of this application also commenced today.

The current Remuneration Order

Lander & Rogers previously published an eBulletin on the draft Remuneration Order in August 2015. This update explained that if the draft Remuneration Order came into effect it would impact all retailers, as well as those in the supply chain, by requiring retailers to manage the compliance of their supply chain partners to ensure that minimum payments to drivers are met. Retailers would also have to conduct their own audit and will have an obligation to report non-compliance. Our previous eBulletin flagged there are substantial compliance costs that could be involved and suggested that retailers make submissions to the RSRT about the effect that the draft Remuneration Order would have on their businesses.

The RSRT received many submissions from parties who would be affected by the draft Remuneration Order, however, on 18 December 2015 the Tribunal decided to make the Order in similar terms to those anticipated in the draft. The final and current Remuneration Order establishes minimum payments and unpaid leave for contractor drivers. It also has other provisions aimed at promoting the observance of the minimum payments and knowledge about the road safety remuneration orders covering contractor drivers.

Application to vary the Remuneration Order

Given the onerous obligations that the Remuneration Order imposed, many of the parties impacted by the order applied to the RSRT to vary the start date from 4 April 2016 and/or include a transitional provision regarding its minimum payment clauses. However, the Tribunal ultimately refused this application. The RSRT reiterated previous comments that the Remuneration Order was the result of an extensive process that included comprehensive consultation, hearings, and research.

Policy response

The Turnbull Government has also signalled intervention in this area by releasing a discussion paper canvassing options for change to the RSRT, which includes dismantling it. The discussion paper follows reviews by Jaguar Consulting and PricewaterhouseCoopers which recommended reducing/removing the RSRT's powers to make remuneration orders.

The Employment Minister, Michaelia Cash, has promised to introduce legislation to delay the effect of the Remuneration Order until January 2017 in order to provide certainty to the trucking industry. It is unclear whether this legislation will have sufficient support to pass through the Senate. Minister Cash has also announced that the Department of Employment will begin conducting consultations this month, with the view to reforming the RSRT.

Therefore, even if Federal Court upholds the RSRT's decision not to vary the Remuneration Order, there is no guarantee that the Order will have a long term effect.

Conclusion

For now there are no immediate steps that retailers and companies in the supply chain need to take to ensure compliance with the Order. However, there is significant activity and uncertainty in this space and we will provide further updates as soon as there are further developments.