The National Road Safety Remuneration Tribunal has released a draft order (Order) which places substantial obligations on “participants in the supply chain”, a term that will likely encompass major and minor retailers as well as those businesses that rely on the road transport industry for the delivery or movement of goods.   

The National Road Safety Remuneration Tribunal, an independent national body responsible for regulating most employment matters within the road transport industry, released the 72-page draft Order after a “a period of extensive consultation with interested parties”. In a  statement the Tribunal noted that the Order is still very much in draft form but the intent is to:  

Impose requirements on an employer or hirer of a road transport driver to whom the draft Payments RSRO applies, and on a participant in the supply chain in relation to such a road transport driver.”  

While the Order will place obligations on many of the parties involved in the road transport services supply chain the obligations being imposed on parties engaging transport providers are unique and, in certain aspects, the first of their kind.  The Order, if finalised, will not only impose legal obligations on parties (such as retailers) who engage transport providers but push the burden of ensuring compliance on to those parties.  It is not difficult to predict that the compliance costs will be considerable.   

The audit and compliance requirements on supply chain participants set out in the Order include requiring participants in the supply chain (the First Party) to take all reasonable measures to ensure other participants (the Second Party) comply with the Order. Specifically, the First Party, when entering into a contract with the Second Party must include in their contract provisions:  

  • that are consistent with the Order;
  • that require the Second Party to comply with the Order;
  • that permit the First Party to conduct an annual audit of the compliance by the Second Party;
  • that require the Second Party to co-operate in theannual audit.

There are also obligations on the First Party to conduct annual audits of the Second Party where the transport contract will continue indefinitely or for more than 30 days (collectively) in any year.  The practical effect of this is that a retailer will have an annual obligation to audit the transport providers that it engages to check that the transport provider is paying its drivers properly.  

Further, if the First Party becomes aware or has a reasonable belief that the Second Party is not complying with the requirements of the Order it must take it upon themselves to:  

  • provide the second party with written notice of the non-compliance, the nature of the non-compliance and the steps required to rectify the non-compliance; and
  • notify relevant regulatory bodies of the alleged non-compliance by the second party with the requirements of this Order.

In other words, the First Party (e.g. a retailer) is obliged to ensure compliance between the Second Party and its employees (e.g. the drivers) and to take action when it suspects non-compliance.  

This is an onerous responsibility. It requires a party to regulate a relationship  it is not actually a party to and imposes penalties for a failure to comply. A breach of the Order will result in a civil penalty of up to $54,000 for a corporation and $10,800 for an individual.   

Does the Order go too far? It appears that the job of policing compliance is being pushed onto those who use transport services, but at what cost?  

The Order is still in draft form and the Tribunal is taking any submissions on its content and effect up to 23 September 2015.  A copy of the Order can be found here.  

If your business is involved in the transport industry or you are a retailer or business that engages transport providers we would strongly recommend that you take the time to consider the obligations set out in the Order and lodge your submissions.