The New South Wales Industrial Relations Commission has varied the to revise the minimum rates of remuneration and to extend minimum rates obligations to additional geographic areas of New South Wales. These new rates obligations, together with various contractual obligations that were imposed in July 2016, will significantly affect transport operators who engage owner drivers to provide transport services in New South Wales.

Background

In December 2013, the Transport Workers’ Union applied to vary the GCCD. Following conciliation conferences throughout 2014 and 2015, the proceedings were divided into two stages: Stage 1 dealing with ‘non-rates’ issues and Stage 2 dealing with rates of payment.

In April 2016, the Commission completed Stage 1 and ordered that the GCCD be varied to expand its coverage and impose new contractual obligations. An Interim GCCD was published in June 2016 and took effect on 2 July 2016.

Conciliation efforts were successful with respect to the Stage 2 issues and the parties proposed a new GCCD by consent, with the GCCD incorporating substantial updates to the rates clauses. The Commission approved the draft GCCD on 15 March 2017, subject to minor amendments. The new GCCD was published on the NSW Industrial Relations website on 5 May 2017.

The new GCCD came into force on 15 April 2017 but will only be enforced from 12 May 2017 (seven days after its publication, pursuant to section 318 of the Industrial Relations Act 1996 (NSW)).

The GCCD is complex and contains various transitional provisions. The new rates structure will not come into full operation until 2023. The relevant dates for the various phases are discussed in more detail below under the heading ‘What are the new rates obligations imposed by the GCCD?’

Who is caught by the GCCD?

The GCCD applies to ‘contracts of carriage’ generally, as defined under Chapter 6 of the Industrial Relations Act 1996 (NSW).

A ‘contract of carriage’ is an agreement for the transportation of goods by motor vehicle or bicycle in the course of a business of transporting those goods, but only where, if the carrier is a: (a) sole trader – no person other than the carrier is employed in driving the vehicle in the course of that business; (b) partnership – no person other than a partner is employed in driving the vehicle in the course of that business; or (c) company – no person is employed in driving the vehicle in the course of that business other than: (i) a director of the company or family member of a director; (ii) a person who, together with members of their family, has a controlling interest in the company; or (iii) a member of the family of a person, who together with the members of his or her family, has a controlling interest the company. If a carrier satisfies this definition of ‘contract of carriage’, any contract of carriage it enters into will be covered by the GCCD unless the contract falls within an excluded category.

The excluded categories include contracts: (a) covered by a Nominated Contract Determination (see schedule F of the GCCD for a full list); (b) performed using a Specialised Vehicle (see the definition in clause 1.1 of the GCCD); (c) for the carriage of packaged goods for multiple hirers using the same vehicle; and (d) for the carriage of livestock. What are the some of the contractual obligations imposed by the GCCD?

The GCCD imposes a number of obligations on contractor drivers and principal contractors.

Some of the obligations imposed on contractor drivers include obligations to:

  • ensure that drivers are medically fit to perform the work and submit to medical examinations if reasonably required by the principal contractor;
  • ensure that drivers submit to drug and alcohol testing if required by the principal contractor’s policies and programs;
  • ensure that drivers maintain valid licences and permits;
  • maintain certain types of insurance cover;
  • ensure only drivers approved by the principal contractor are used in provision of transport services;
  • comply with administrative requirements (such as returning delivery dockets and work sheets to principal contractors, maintaining up to date log books and ensuring that drivers maintain a system verifying vehicle maintenance); and
  • comply with loading and delivery requirements.

Some of the obligations imposed on principal contractors include obligations to:

  • provide a copy of the GCCD to relevant contractor drivers and display the GCCD in the workplace;
  • provide a copy of the applicable rates schedule to relevant contractor drivers before providing transport services, and whenever there is a change to the rates;
  • ensure rostering and allocation of work is transparent, reasonable and lawful;
  • keep records in relation to rates schedules, start and finish times, hours worked per day, kilometres travelled per day, start and finish places, remuneration paid, written contracts, schedules and rosters, safe driving plans, and breaches or potential breaches of fatigue management laws;
  • consult with contractor drivers about any decision to change a fleet mix that is likely to have significant effects on the contractor drivers; and
  • not to sell vehicles with work.

Undisputed tax invoices rendered by contractor drivers covered by the GCCD must be paid within 30 days of receipt.

Who will be required to pay minimum rates under the GCCD?

The obligation to pay minimum rates (set out in Part 4 of the GCCD) does not apply to all contracts of carriage.

The obligation currently applies to contracts of carriage for the transportation of goods within the County of Cumberland (which covers most of metropolitan Sydney) or for the transportation of goods locally (anywhere in New South Wales) over distances not more than 50 kilometres.

From 1 January 2019, the new rates will also apply to a contract of carriage for a single journey commencing within the County of Cumberland and finishing within: (a) a 50 kilometre radius of the Newcastle GPO; or (b) a rectangular area being 50 kilometres north, 20 kilometres east, 50 kilometres south and 20 kilometres west of the Wollongong GPO. From 1 January 2019, the rates obligations will also apply to the following categories of cartage work that were previously excluded from Part 4 of the GCCD: (a) refrigerated goods in refrigeration vehicles; (b) cash in armoured vehicles; (c) furniture; and (d) goods in the private pathology industry. There are complex provisions in the GCCD that deal with alternative remuneration arrangements that may be entered into between contractor drivers and principals.

What are the new rates obligations imposed by the GCCD?

The following table provides a general overview of the main changes to the rates obligations. Please note that the table does not contain a complete list of all rates obligations under the GCCD.

Phase Relevant dates What are the applicable rates? Which contracts are caught by the rates obligations?
Phase 1 15 April 2017 to 31 December 2018 The existing rates structure will continue to apply but with increased hourly standing rates (see Schedule A of the GCCD). Contracts of carriage for the transportation of goods within the County of Cumberland (which covers most of metropolitan Sydney) or for the transportation of goods locally (anywhere in New South Wales) over distances not more than 50 kilometres.
Phase 2 (overview) From 1 January 2019 A new hourly and kilometre rates structure will apply, as calculated through the application of a sophisticated cost and rate model (see Schedule B of the GCCD). The new rates will be transitionally phased in from 1 January 2019. The rates will be raised (or lowered where relevant) from the old rates incrementally from 1 January 2019 and will only apply in full from 1 July 2023. New hourly remuneration rates will also apply for NHVR training and accreditation and for those contract carriers who are required to obtain a blue card or wear a certain type of workwear or personal protective equipment. Contracts of carriage within the County of Cumberland (which covers most of metropolitan Sydney) or for the transportation of goods locally (anywhere in New South Wales) over distances not more than 50 kilometres. and Contracts of carriage for a single journey commencing within the County of Cumberland and finishing within: (a) a 50 kilometre radius of the Newcastle GPO; or (b) a rectangular area being 50 kilometres north, 20 kilometres east, 50 kilometres south and 20 kilometres west of Wollongong GPO.
Phase 2A 1 January 2019 to 31 December 2019 If the new rate is higher than the old rate - the old rate plus 20% of the increase in the rate of remuneration. If the new rate is lower than the old rate - the old rate less 20% of the decrease in the rate of remuneration. See Phase 2 (overview).
Phase 2B 1 January 2020 to 31 December 2020 If the new rate is higher than the old rate - the old rate plus 40% of the increase in the rate of remuneration If the new rate is lower than the old rate - the old rate less 40% of the decrease in the rate of remuneration. See Phase 2 (overview).
Phase 2C 1 January 2021 to 31 December 2021 If the new rate is higher than the old rate - the old rate plus 60% of the increase in the rate of remuneration. If the new rate is lower than the old rate - the old rate less 60% of the decrease in the rate of remuneration. See Phase 2 (overview).
Phase 2D 1 July 2022 to 30 June 2022 If the new rate is higher than the old rate  the old rate plus 80% of the increase in the rate of remuneration. If the new rate is lower than the old rates - the old rate less 80% of the decrease in the rate of remuneration. See Phase 2 (overview).
Phase 2E From 1 July 2023 If the new rate is higher than the old rate - the old rate plus 20% of the increase in the rate of remuneration If the new rate is lower than the old rate - the old rate less 20% of the decrease in the rate of remuneration See Phase 2 (overview).

What must you do now?

Any transport operator that engages owner drivers in New South Wales must:

  • establish which of their contracts with transport providers fall within the scope of the GCCD and which of those contracts are, or will become, subject to the rates obligations;
  • review any contracts caught by the GCCD to ensure they comply with the GCCD;
  • become familiar with their obligations under the GCCD and ensure their work systems, policies and procedures are consistent with it;
  • ensure that owner drivers are paid in accordance with the rate increases that apply from 15 April 2017 until 31 December 2018; and
  • become familiar with the new rates structure that will apply from 1 January 2019 and ensure that owner drivers are paid in accordance with the new structure.