SUBMISSION TO THE REVIEW OF THE
ROAD SAFETY REMUNERATION SYSTEM
January 2014
Livestock and Rural Transport Association of Western
Australia (Inc)
SUBMISSION TO THE REVIEW OF THE ROAD SAFETY REMUNERATION
SYSTEM
BACKGROUND
1. The Livestock and Rural Transport Association of Western Australia (Inc)
(LRTAWA) has represented rural transporters in WA since 1980. Membership is
open to any person, company or partnership that transports products for hire or
reward that is associated with primary production and includes the majority of WA
livestock transporters and a large proportion of companies carrying inputs and
outputs of primary producers. Members include companies with more than 50
prime movers to those with one-two vehicles operating small family businesses. In
2012-13 the value of agricultural production in WA was $11 billion1 and our
members transported the majority of these products.
2. The LRTAWA does not represent individual companies or people with regard to
specific issues but is actively involved in helping governments and other
stakeholders develop policies that benefit the rural transport industry as a whole.
Rural transport in Western Australia has some unique characteristics that are
important for policy makers to consider. With 33% of Australia’s landmass2,
Western Australia has one of the largest geographically spread road systems in
the world covering 2.5 million square kilometres3. In linear terms there is
approximately 54,000 kilometres of sealed and 95,000 kilometres of unsealed road
network.4 Our members travel on most roads in WA from highways to remote
outback tracks and many members transport to and from other states and
territories.
STRUCTURE OF THE INDUSTRY
3. Heavy vehicle transport is not an homogeneous industry. There are discrete
sectors within the industry that have specific needs based on their clientele, the
commodities they transport and the infrastructure they use. Practices that are
prevalent in one sector of the industry are not necessarily common practice in
another sector. Similarly practices between states may also differ. It is estimated
that 95% of heavy vehicle operators in Western Australia do not cross the border
to conduct their business. The LRTAWA considers rural transport in Western
Australia is a distinct sector and that applying the same rules to rural transport as
are applied to general line haul freight risks the efficiency of the industry without
actually improving safety.
4. Rural transport in WA is serviced by a mix of employees and sub-contractors. The
majority of employers and/or hirers in the WA rural transport industry are small
companies often hiring colleagues who are at times hirers themselves. Typically
transport companies have a core workforce that is supplemented by subcontractors to accommodate peak demands such as during harvest. Competition
Western Australia Economic Profile – November 2013; Government of Western Australia,
Department of State Development
2
ibid
3
Main Roads Western Australia website – About Us
4
Main Roads Western Australia, 2012.
1
Page 2 of 23
for experienced drivers in WA is such that above award payments and other
incentives are common.
5. Smaller owner driver companies frequently use sub-contractors to provide relief for
the owner or when extra work is available. Sub-contractors may provide their
driving expertise only or driving plus a vehicle.
6. The ability to acquire the services of a sub-contractor at short notice is a major
efficiency dividend. The transaction is usually completed via a telephone call and
the contract is verbal. For many transporters the majority of their business
transactions are conducted from the cab of the truck with records maintained after
hours or by a spouse operating from a home based office. This is a situation that
serves primary producers well as it enables quick responses, maximum use of
equipment and efficient use of road infrastructure. This in turn contributes to
competitive transport rates. For a variety of reasons, transport rates in rural WA
are reputedly lower than the equivalent services in eastern Australia.
Notwithstanding the lower rates reports from the Australian Farm Institute state
that the costs involved in transporting agricultural commodities have an important
bearing on the competitiveness of Australian farmers and the returns they receive.
It is estimated that transport costs in WA represent $6-$14 per hectare in input
costs.5
THE REGULATORY ENVIRONMENT
7. It is commonly accepted that the regulatory environment for transport operators is
becoming increasingly complex. Business owners are subject to a vast array of
legislation, regulation, government policy and public sector administrative rules
which are common to all businesses but in addition the following specific laws
impact on WA rural transporters:
State
Federal
Fair Work Act 2009
Industrial Relations Act 1979
Superannuation Guarantee Charge Act 1992
Minimum Conditions of Employment Act 1993
Road Safety Remuneration Act 2012
Occupational Safety and Health Act 1984
Motor Vehicle Standards Act 1989
Workers’ Compensation and Injury Management Act 1981
Australian Road Rules
Owner Drivers (Contracts and Disputes) Act 2007
Animal Welfare
Main Roads Act 1930
Australian Animal Welfare Standards and
Guidelines for Land Transport of Livestock
Road Traffic Act 1974
Maritime Transport and Offshore Facilities
Security Act and Regulations 2003
Road Traffic Administration Act 2008
5
Western Australia’s Farm Input Taskforce 2008 Report submitted to the Hon. Terry Redman MLA, Minister for Agriculture and
Food; Fisheries by the WA Farm Inputs Taskforce Committee of the Rural Business Development Corporation
Page 3 of 23
Road Traffic Vehicles Act 2012
Road Traffic (Vehicle Standards) Regulations 2002
Road Traffic (Vehicle Standards) Rules 2002
Animal Welfare Act 2002
Biosecurity and Agricultural Management (Movement of
Livestock and Apiaries) Regulations 2013
8. Arising from some of the above laws are specific record keeping, compliance and
auditing requirements such as fatigue management and heavy vehicle
accreditation. Operators must also adhere to road network restrictions for different
vehicle classes which in rural areas require regular management in order to
comply as vehicle access varies depending on the classification and type of road.
It is acknowledged that recent modifications to the system have improved
efficiency. Additionally specific local governments impose compliance
requirements on transport operators which may vary between local government
authorities.
9.
The WA Owner-Drivers (Contracts and Disputes) Act 2007 is particularly relevant
to this submission. This Act came into effect in August 2008 and gives
owner/drivers and hirers access to a low cost dispute settlement process through
a tribunal which is subject to the same rules and processes as the WA Industrial
Relations Commission. The Act provides for record keeping, payment terms,
implied contract terms, negotiating in good faith, interest on unpaid amounts,
unconscionable conduct, compliance and enforcement. The Road Freight
Transport Industry Council which is created by the Act also issues guidelines rates
on a per kilometre and per hour dollar basis.
10. A Code of Conduct is also issued under the Act. All owner-driver contracts and
agreements must comply with the Code. In addition the Department of Transport
provides a number of resources for owner-drivers to assist with determining rates
and developing contracts with hirers.
11. Although the owner-drivers regulatory regime in WA is not without its faults, it
provides a safety net of basic conditions that is sufficiently broad enough to not
intervene excessively in normal commercial transactions. Since 2008 it has been
used sparingly by WA owner drivers with approximately 20 matters being heard6.
It is not known how many matters may have been successfully resolved by the
parties without recourse to the Tribunal.
12. It is noted that the Act is currently under review.
THE IMPACT OF THE TRIBUNAL ON THE ROAD TRANSPORT INDUSTRY
AND ITS SAFETY PERFORMANCE (TO DATE AND IN THE FUTURE)
13. The Road Safety Remuneration Tribunal has the potential to be far more
interventionist in commercial transactions than its WA counterpart. Experience to
date with the first Road Safety Remuneration Order is that it is a blunt instrument
with little motivation to respond to the commercial realities that exist in discrete
sectors of the transport industry.
6
Western Australian Industrial Relations Commission website January 2014
Page 4 of 23
14. In its first annual work program the Tribunal announced it would enquire into the
retail, livestock, bulk grain, interstate long distance and intrastate long distance
sectors of the transport industry. A timetable for consultation was also announced.
The initial consultation periods provided a reasonable period of time to respond,
however, as time progressed and the timetable moved closer to a decision on a
Road Safety Remuneration Order the consultation periods became shorter and
more difficult for representative bodies with limited resources to respond to. Even
bodies with large resources had well publicised difficulties with the time frames.
The Productivity Commission has noted that consultation contributes to regulatory
quality and minimises the risk of regulatory failure and has made it clear that
timeframes should be cognisant of the limited resources of small business in
particular.7
15. Despite identifying livestock and bulk grain transport as distinct sectors in its work
program there is no evidence that livestock and bulk grain transport have been
given any special consideration in the decision making process. Importantly in
deciding whether to make a road safety remuneration order, the Tribunal must
have regard to the special circumstances of areas that are particularly reliant on
the road transport industry, such as rural, regional and other isolated areas.
Notwithstanding that two predominantly rural and regional transport areas were
highlighted in its work program the single reference to regional transport in the
Tribunals reasons for decision was as follows:
“ With respect to the special circumstances of areas that are particularly reliant on
the road transport industry, such as rural, regional and other isolated areas, we
recognise that such areas are more likely to be affected by the road transport
services provided by road transport drivers as part of long distance operations in a
heavy vehicle. Further, we recognise that, amongst other things, employers or
hirers of road transport drivers and other participants in the supply chain in relation
to the road transport drivers in such areas may have fewer resources. The
application clause has been influenced by the special circumstances of such
areas. In addition, with the special circumstances in mind, the safe driving plans
clause applies in respect of a road transport driver undertaking a long distance
operation using a motor vehicle with a gross vehicle mass of more than 4.5
tonnes. Moreover, where appropriate, the other remaining clauses provide for
flexibility by requiring an employer or hirer to “take all reasonable measures” or act
“so far as is reasonably practicable”, leave the means of implementation of a
clause to the employer or hirer and provide for electronic means of compliance.”8
No research was published, as required, that would indicate any particular
enquiries had been made to consider the impact of the decision on rural areas and
the basis for the rationale outlined above. Significantly there was no commentary
on specific safety benefits that might arise.
16. The first RSRO was published in December 2013 and commences on 1 May
2014. It is therefore only possible to comment on the likely impact of the Order.
The most significant impact for LRTAWA members will be with regard to safe
7
Regulation and its Review 2003-04; Productivity Commission Annual Report Series
Road Transport and Distribution and Long Distance Operations Road Safety Remuneration
Order 2014; Decision of the Road Safety Remuneration Tribunal 2013] RSRTFB 7; para 418.
8
Page 5 of 23
driving plans and written contracts. Implementation of these requirements will
place additional administrative burdens on our members and will impact
competition in the rural transport possibly leading to a structural shift in the
industry. The additional compliance burden will be such that some small family
operators who are already finding it difficult to accommodate existing requirements
will modify their operations by either substituting external labour for family
members or taking on less work. The ability to pass costs on to clients is limited
by the client’s capacity and willingness to pay. Larger operators with scope to
accommodate higher administrative costs will, although similarly burdened, be
able to absorb the burden more effectively and therefore be more competitive
compared to smaller operators.
17. Rural transporters’ prospects are directly linked to future of livestock and grain
industries. As price takers our clients have limited capacity to absorb higher costs
unless there is a corresponding increase in the price they receive for their goods.
A common response to increased costs is to find an alternative or to reduce
reliance on them. More and more growers are purchasing their own heavy
vehicles to transport their goods to market and are gaining the benefit of farm
diesel subsidies and other grower related benefits. In many cases they branch out
to transport goods for other growers and compete with professional transport
companies. Depending on the size of the vehicle they can often avoid the scrutiny
of heavy vehicle accreditation schemes which has obvious safety implications at
the same time as squeezing professional operators out of the market. Increased
compliance costs to rural transport operators will where possible be passed on to
customers and could ultimately lead to farmers seeking alternatives to using
professional transport companies as outlined above.
18. Participants in the supply chain other than transporters will also have an increased
compliance burden as they seek to take reasonable steps to ensure compliance
with the Order.
19. To illustrate the practical difficulties of implementing the contractual requirements
and safe driving plans, the following describes a typical day in the life of a WA
livestock transport company.
20. Transport company XYZ agrees to transport sheep to an abattoir in Bunbury
starting from Northampton with nine pick up points along the way, a distance of
795 kilometres. There are nine consignors, three agents and one consignee or
“participants in the supply chain” involved in this journey. It is important to note that
arrangements are often made the day before the journey or sometimes the day of
the journey. When the delivery has been made the transport company will seek to
avoid an unloaded vehicle returning to base and may be able organise sheep to
be collected from saleyards along the way and delivered en route. These
arrangements will be made whilst the driver is in transit. Under the terms of the
RSRO the following would need to occur.

At least 13 participants in the supply chain would need to take
“reasonable measures” to ensure that the contract with the driver is
consistent with the Order.
Page 6 of 23

The safe driving plan must be prepared and implemented, and
reviewed and updated in consultation with the driver and witnessed
where practicable by 13 participants in the supply chain.
Logistically this would need to take place within a matter of hours
and in some cases less time as arrangements are made at short
notice. Frequently the plan would be modified en route and the
specific requirements relating to timeframes and distances
amended. This is in addition to existing requirements for drivers to
record rest breaks under fatigue regulation and animal welfare
checks under animal welfare laws.
21. This example demonstrates the potential impost on efficiency with no evidence
that safety will be improved.
22. We do not propose to re-state the jurisdiction of the Road Safety Remuneration
Act as that will be well known by this review but it is important to focus on the
stated objects of the Act as they relate to safety and fairness. Section 3 states
that:
The object of this Act is to promote safety and fairness in the road transport
industry by doing the following:
(a) ensuring that road transport drivers do not have remuneration-related
incentives to work in an unsafe manner;
(b) removing remuneration-related incentives, pressures and practices that
contribute to unsafe work practices;
(c) ensuring that road transport drivers are paid for their work, including
loading or unloading their vehicles or waiting for someone else to load or
unload their vehicles;
(d) developing and applying reasonable and enforceable standards
throughout the road transport industry supply chain to ensure the safety of
road transport drivers;
(e) ensuring that hirers of road transport drivers and participants in the supply
chain take responsibility for implementing and maintaining those standards;
(f) facilitating access to dispute resolution procedures relating to remuneration
and related conditions for road transport drivers.
23. These objects are far reaching and provide a platform for the RSRT to intervene in
the commercial activities of businesses in an unprecedented manner. For
example requiring other participants in the supply chain to ensure contracts satisfy
the requirements of RSRT orders contrary to existing notions of commercial
confidentiality. There is little obligation for the Tribunal to publish details of the
potential impact of their decisions including costs akin to a regulatory impact
statement.
24. The RSRT has confined its deliberations to matters other than remuneration but it
has clear jurisdiction to make orders in this regard. The LRTAWA is of the view
that the existing jurisdiction of the Fair Work Australia, and the WA Industrial
Relations Commission for employers and employees not covered by the federal
system, to make and vary awards, deal with contractual arrangements and provide
for bargaining is sufficient to determine adequate safety related remuneration if
there is genuine evidence there is a causal link between rates of pay and safety
outcomes, although it is noted this premise is far from settled. Until this link is
Page 7 of 23
firmly established the need for of a special body is questionable. The Road
Transport (Long Distance Operations) Award 2010 already makes provision for
per kilometre and per hour rate of pay and takes fatigue management
requirements into account.
25. If it is considered necessary to make special provision for the transport industry,
particularly to accommodate owner drivers, it would be preferable to amend the
Fair Work Act 2009 to deal with additional but limited transport related matters.
Care must be taken however not to provide scope for policy development and
implementation by a judicial body.
26. The requirement to publish an annual work program should also be reviewed as it
is contended that this forces activity even when there may be no justification for a
work program.
INTERACTION WITH OTHER LAWS
27. Under the Occupational Safety and Health Act 1984 (WA) Code of Practice for
Fatigue Management for Commercial Vehicle Drivers a responsible person at a
workplace must ensure a driver fatigue management plan is developed and kept
current by a competent person for every driver. This information includes
scheduling, rostering, fitness for work, training and managing incidents.
28. The health and safety statutory requirements are supported by WA’s heavy vehicle
accreditation system which includes a fatigue management module. Heavy
Vehicle accreditation is mandatory for individuals and organisations which:




Operate a B-double or road train; or
Operate a truck and trailer over 42.5 tonnes gross mass; or
Operate under a concessional loading scheme or require an annual permit
or notice or require more than 4 single trip permits (oversize and extra
mass only) ; and
who perform transport tasks for hire or reward
29. The fatigue management module requires the following documented evidence:
 All trip records;
 Start and finish times (trip sheets) for trips with details of any alterations;
 Scheduling of trips; The fatigue management module requires the following
documented evidence:
 All trip records;
 Start and finish times (trip sheets) for trips with details of any alterations;
 Scheduling of trips;
 Rosters (including name of driver and expected start and finish times);
 Evidence of driver’s medical assessments;
 Training records; and
 Documents detailing any reportable accidents or incidents.
30. A significant feature of WA’s fatigue management regime is the integration of
fatigue management with other management systems whereby those in control of
the journey are required to plan how driver fatigue and fitness for duty will be
managed. The system also focuses on rest and specifies minimum rest in every
Page 8 of 23
24 hours. Accreditation audits are conducted annually. There is a high level of
compliance, with research indicating that 94% of companies prepare fatigue
management plans9. Importantly the system has widespread industry support
following considerable consultation with industry over a long period of time.
Protection of WA’s fatigue regime is considered by the WA Government and
industry to be so important that it was a major consideration in WA deciding not to
join the national heavy vehicle regulator.
31. The RSRO creates a new record keeping regime that has not been contemplated
in terms of the existing fatigue management requirements. The impact on fatigue
management effectiveness has therefore not been debated, researched and
analysed as was the case when the system was first introduced by the WA
Parliament. Fatigue management is a sensitive issue. Companies have invested
considerable resources in complying with existing requirements and it is important
that full consideration is given to the impact of any change and overlap as
described above.
32. The Fair Work Act 2009 (Cwth) and Fair Work Regulations 2009 require
employers to maintain certain records including the employee’s name and
commencement date, the basis of the employee’s employment (full or part-time
and permanent, temporary or casual), rate of pay, the gross and net amounts paid
and any deductions from the gross amount, the details of any incentive-based
payment, bonus, loading, penalty rate, or other monetary allowance or separately
identifiable entitlement paid, hours of work, overtime, leave paid and entitlement
and superannuation contributions. In most cases employment records are
maintained electronically as part of a suite of business systems.
33. Although not necessarily related to other laws, there is an apparent inconsistency
whereby Section 8 (3) of the Road Safety Remuneration Act 2012 (Cwth) states
that a road transport contract may be in writing, oral, or partly in writing and partly
oral. Under clause 7.1 of the RSRO an employer or hirer must provide a road
transport driver with a written employment contract or written road transport
contract covering the employment or engagement of the road transport driver,
prior to the road transport driver commencing their employment or engagement
with the employer or hirer. In effect the RSRO removes the options available for
contracts that were contemplated by Parliament at the time the RSR Act was
proclaimed.
CONCLUSION
34. The LRTAWA does not support a separate tribunal for dealing with safety in the
road transport industry especially one that is created under an industrial relations
regime. At this point in time there is no conclusive evidence of a causal link
between pay rates and safety performance. Businesses are therefore being
burdened by additional regulation without justification.
35. Fair Work Australia and in WA the Industrial Relations Commission are the
competent tribunals to deal with issues pertaining to remuneration in the transport
9
Report to the Independent Expert Panel on the Western Australian Fatigue Management Regime; WA
Department of Transport; 2011
Page 9 of 23
industry. Western Australia already has an adequate statutory owner drivers’
contracts regime.
36. If a separate tribunal or body is considered necessary its powers should be limited.
The decision making process should be publicly accountable and include details
on costs and benefits particularly with regard to any special areas that are
identified as requiring individual consideration such as rural an regional locations.
37. Careful consideration should be given to the appropriateness of a tribunal having
scope for determining standards without decision making parameters as this can
lead to policy making as opposed to decision making.
Attachments:
1. Example of a run sheet for livestock transport in WA
2. LRTWA submission to the RSRT first draft order
Page 10 of 23
ATTACHMENT 1
Page 11 of 23
The Hon. J Acton,
President,
Road Safety Remuneration Tribunal
GPO Box 1994
MELBOURNE VIC 3001
Dear President
I have pleasure in providing a submission from the Livestock and Rural Transport
Association of Western Australia (Inc) to the draft Road Safety Remuneration Order.
I am aware the Australian Livestock and Rural Transporters Association has also made
a submission. Western Australia has participated in developing that submission
although there are some obvious differences between the two approaches.
Western Australian rural transporters would be very pleased to host members of the
Tribunal in their rural transporting activities to support the contents of the submission.
Thank you for the opportunity to comment.
Yours faithfully
Stephen Marley
President
1st August 2013
Pastoral House, 277 Great Eastern Highway, Belmont WA 6104
Ph: 08 9478 3655 Fax: 08 9277 7311
SUBMISSION TO THE ROAD SAFETY REMUNERATION TRIBUNAL
on the
DRAFT ROAD SAFETY REMUNERATION ORDER 2013
1st August 2013
INTRODUCTION
1. The Livestock and Rural Transport Association of Western Australia (Inc) appreciates the
opportunity to comment on the draft Road Safety Remuneration (RSR) Order prior to a final
decision being made on whether to issue an order at all; and the content and coverage if an
order is considered necessary.
2. The LRTAWA represents businesses and individuals who fall into the definition of hirer and
contractor drivers. Members include the majority of WA livestock transporters and a large
proportion of transporters carrying other rural commodities. Membership is open to any
person, company or partnership that transports products for hire or reward that is associated
with primary production. Our members operate throughout Western Australia and many
transport to and from other states and territories. Members include companies with more
than 50 prime movers to those with one-two vehicles operating small family businesses. Not
all members are constitutional corporations.
PROFILE OF THE RURAL TRANSPORT INDUSTRY IN WESTERN AUSTRALIA
3. Heavy Vehicle transport is not an homogeneous industry. There are discrete sectors within
the industry that have specific needs based on their clientele, the commodities they transport
and the infrastructure they use. Practices that are prevalent in one sector of the industry are
not necessarily common practice in another sector. Similarly practices between states may
also differ. The LRTAWA considers rural transport in Western Australia is a distinct sector
and that applying the same rules to rural transport as are applied to general line haul freight
risks the efficiency of the industry without actually improving safety.
4. Rural transport in WA is serviced by a mix of employees and sub-contractors. The majority
of employers and/or hirers in the WA rural transport industry are small companies often hiring
colleagues who are at times the hirers themselves. Typically transport companies have a
core workforce that is supplemented by sub-contractors to accommodate peak demands
such as during harvest. Competition for experienced drivers in WA is such that above award
payments and other incentives are common.
5. Smaller owner driver companies frequently use sub-contractors to provide relief for the
owner or when extra work is available. Sub-contractors may provide their driving expertise
only or driving plus a vehicle.
6. The ability to acquire the services of a sub-contractor at short notice is a major efficiency
dividend. The transaction is usually completed via a telephone call and the contract is
verbal. Any change that requires additional administration will reduce efficiency and
Page 1 of 23
Livestock & Rural Transport Association of Western Australia (inc)
productivity and impact on competition. Requirement for participants in supply chain to
witness a safe driving plan is unworkable in these circumstances
COVERAGE
7. The draft RSR Order has widespread coverage of the road transport industry. As such there
is little scope for accommodating operational characteristics that may be unique to a
particular sector.
8. As indicated earlier rural transport has some unique features that are not comparable with
general and long haul freight. For this reason the LRTAWA recommends that if the Tribunal
decides to issue the RSR Order, consideration should be given to exempting transporters
who are predominantly engaged in transporting commodities for on farm primary production.
9. If the Tribunal considers that evidence exists to issue an order that covers rural transport a
separate order should be made that takes the special circumstances of rural transport into
account. This should only be done after in depth analysis, evidence gathering and site visits
across all states.
MATTERS THE TRIBUNAL MUST HAVE REGARD TO
10. The COAG Principles of Best Practice Regulation suggest that an important first step in
considering new regulation is to examine closely whether there is a problem and establish a
case for action prior to proceeding i.e is there market failure or are regulations failing?10
Whilst it is recognised that these principles were prepared for a Ministerial Council and not a
judicial body such as the Road Safety Remuneration Tribunal (RSRT), as a standard setting
body the philosophy expressed is relevant to the considerations that the Tribunal is required
to take into account when issuing an order. The effect of the order will be to regulate a large
portion of the heavy vehicle transport industry and the potential impact should be considered
with the rigour of a regulatory impact statement. The cost impact is fundamental to these
considerations and to the best of our knowledge there is no evidence of regulation failure or
significant market failure in WA’s rural transport sector.
11. Whilst it may be argued that there is a link between remuneration and unsafe practices with
regard to line haul operators servicing the retail sector there is no evidence to suggest a
similar issue exists in WA rural transport. As the Association representing livestock and other
rural carriers, many of them owner drivers, it is significant that we cannot produce any
evidence that suggests there is a link between remuneration and safety outcomes, in this
sector at least, in Western Australia.
12. The WA Road Freight Tribunal established under the Owner Drivers (Contracts and
Disputes) Act 2007 has adequately dealt with two issues of non-payment of a grain
transporter but neither of these circumstances involved any element of coercion or
unconscionable conduct with regard to transport time. The question must therefore be asked
as to exactly what problem this order will address in the rural transport sector and will it have
negative unintended consequences?
13. Under section 20 of the Road Safety Remuneration Act 2012, the Tribunal must have regard
to a number of matters in deciding whether to make a road safety remuneration order.
These matters include:
10
COAG Best Practice Regulation: A Guide for Ministerial Councils and National Standard Setting Bodies.
Page 2 of 23
Livestock & Rural Transport Association of Western Australia (inc)
14. The likely impact of any order on the viability of businesses in the road transport
industry.
a. The cost impact of additional record keeping and administration should not be
underestimated particularly on small operators. This issue is canvassed in detail
elsewhere in the submission but suffice to say that the proposed requirement to involve all
participants in the supply chain for each transport service with regard to contracts and
safe driving plans are so impractical in the rural transport environment that they risk
having a very negative effect on efficiency and ultimately the viability of rural transport
businesses.
b. Additionally the requirement to pay contractors within 14 days would have a serious
impact on cash flow. The industry standard is 30 days as this allows for the hirer to be
paid for the services provided, bearing in mind that the hirer is often a small company as
well. Payment terms of 30 days are provided by the Owner- Drivers (Contracts and
Disputes) Act 2007 (WA).
15. The special circumstances of areas that are particularly reliant on the road transport
industry, such as rural, regional and other isolated areas.
a. Rural transporters service primary producers therefore their prospects are directly linked
to future of livestock and grain industries. As price takers our clients have limited capacity
to absorb higher costs unless there is a corresponding increase in the price they receive
for their goods. A common response to increased costs is to find an alternative or to
reduce reliance on them. More and more growers are purchasing their own heavy
vehicles to transport their goods to market and are gaining the benefit of farm diesel
subsidies and other grower related benefits. In many cases they branch out to transport
goods for other growers and compete with professional transport companies. Depending
on the size of the vehicle they can often avoid the scrutiny of heavy vehicle accreditation
schemes which has obvious safety implications at the same time as squeezing
professional operators out of the market.
b. Increased compliance costs to rural transport operators arising from the draft RSR Order
will where possible be passed on to customers and could ultimately lead to farmers
seeking alternatives to using professional transport companies as outlined above.
Reports from the Australian Farm Institute state that the costs involved in transporting
agricultural commodities have an important bearing on the competitiveness of Australian
farmers and the returns they receive. It is estimated that transport costs in WA represent
$6-$14 per hectare in input costs11. Farm sensitivity to transport cost pressures is not
hard to see.
c. Other participants in the supply chain will also have an increased compliance burden as
they seek to take reasonable steps to ensure compliance with section 7.4 relating to
contracts and section 11.4 relating to consultation with regard to safe driving plans.
d. An example of a typical day in the life of a livestock transport company helps illustrate the
practical difficulties in applying the proposed provisions with regard to contracts and safe
Western Australia’s Farm Input Taskforce 2008 Report submitted to the Hon. Terry Redman MLA, Minister for
Agriculture and Food; Fisheries by the Wa Farm Inputs Taskforce Committee of the Rural Business Development
Corporation
11
Page 3 of 23
Livestock & Rural Transport Association of Western Australia (inc)
driving plans. Attachment A which is an actual run sheet from a WA transport company
(redacted for confidentiality) has been used for guidance.
e. Transport company XYZ agrees to transport sheep to an abattoir in Bunbury starting from
Northampton with nine pick up points along the way, a distance of 795 kilometres. There
are nine consignors, three agents and one consignee or “participants in the supply chain”
involved in this journey. It is important to note that arrangements are often made the day
before the journey or sometimes the day of the journey. When the delivery has been
made the transport company will seek to avoid an unloaded vehicle returning to base and
may be able organise sheep to be collected from saleyards along the way and delivered
en route. These arrangements will be made whilst the driver is in transit. Under the terms
of the draft RSR Order the following would need to occur using the example in
Attachment A.

At least 13 participants in the supply chain would need to take “reasonable steps” to
ensure that the contract with the driver is consistent with the Order.

The safe driving plan must be prepared and implemented, and reviewed and updated
in consultation with the driver and 13 participants in the supply chain. Logistically this
would need to take place within a matter of hours and in some cases less time as
arrangements are made at short notice.

The participants in the supply chain need to satisfy themselves that the road transport
services can be performed in accordance with the plan regardless of whether they
have any transport expertise or not. In many cases it will be difficult for participants to
fulfil their obligations under the order as they will not have sufficient knowledge of the
route and may not be aware of any changes that are made to the route as a result of
pick up points being added along the way.
16. The likely impact of any order on the national economy and on the movement of
freight across the nation
a. The draft order in its current form is likely to impact on competition in rural transport and
possibly lead to a structural shift in the industry. The additional compliance burden will be
such that some small family operators who are already finding it difficult to accommodate
existing requirements will modify their operations by either substituting external labour for
family members or taking on less work. The ability to pass costs on to clients is limited by
the client’s capacity and willingness to pay. Larger operators with scope to accommodate
higher administrative costs will, although similarly burdened, be able to absorb the burden
more effectively and therefore be more competitive compared to smaller operators.
17. The need to avoid unnecessary overlap with the Fair Work Act 2009 and other laws
a. Under the Occupational Safety and Health Act 1984 (WA) Code of Practice for Fatigue
Management for Commercial Vehicle Drivers a responsible person at a workplace must
ensure a driver fatigue management plan is developed and kept current by a competent
person for every driver. This information includes scheduling, rostering, fitness for work,
training and managing incidents.
b. The health and safety statutory requirements are supported by WA’s heavy vehicle
accreditation system which includes a fatigue management module. Heavy Vehicle
accreditation is mandatory for individuals and organisations which:
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Operate a B-double or road train; or
Operate a truck and trailer over 42.5 tonnes gross mass; or
Operate under a concessional loading scheme or require an annual permit or notice
or require more than 4 single trip permits (oversize and extra mass only) ; and
who perform transport tasks for hire or reward
c. The fatigue management module requires the following documented evidence:

All trip records;

Start and finish times (trip sheets) for trips with details of any alterations;

Scheduling of trips;

Rosters (including name of driver and expected start and finish times);

Evidence of driver’s medical assessments;
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Training records; and
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Documents detailing any reportable accidents or incidents.
d. A significant feature of WA’s fatigue management regime is the integration of fatigue
management with other management systems whereby those in control of the journey are
required to plan how driver fatigue and fitness for duty will be managed. The system also
focuses on rest and specifies minimum rest in every 24 hours. Accreditation audits are
conducted annually. There is a high level of compliance, with research indicating that 94%
of companies prepare fatigue management plans12.
Importantly the system has
widespread industry support following considerable consultation with industry over a long
period of time. Protection of WA’s fatigue regime is considered by the WA Government
and industry to be so important that it was a major consideration in WA deciding not to join
the national heavy vehicle regulator.
e. The proposal under the draft RSR Order to amalgamate fatigue record keeping with
remuneration details creates a new record keeping regime that has not been
contemplated in terms of the existing fatigue management requirements. The impact on
fatigue management effectiveness has therefore not been debated, researched and
analysed as was the case when the system was first introduced by the WA Parliament.
Fatigue management is a sensitive issue. Companies have invested considerable
resources in complying with existing requirements and it is important that full
consideration is given to the impact of any change and overlap as described above.
f. The Fair Work Act 2009 (Cwth) and Fair Work Regulations 2009 require employers to
maintain certain records including the employee’s name and commencement date, the
basis of the employee’s employment (full or part-time and permanent, temporary or
casual), rate of pay, the gross and net amounts paid and any deductions from the gross
amount, the details of any incentive-based payment, bonus, loading, penalty rate, or other
monetary allowance or separately identifiable entitlement paid, hours of work, overtime,
leave paid and entitlement and superannuation contributions. In most cases employment
records are maintained electronically as part of a suite of business systems.
g. The draft RSR Order proposes replicating much of the information that is currently
maintained as time and wage records. Not only is this doubling the record keeping effort,
it also requires information that has traditionally been confidential to be conveyed to other
12
Report to the Independent Expert Panel on the Western Australian Fatigue Management Regime; WA Department of Transport; 2011
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participants in the supply chain. The exemption under the Privacy Act 1988 relating to
employee records only relates to the current or former employment relationship between
the employer and the individual. Provision of this information to other participants in the
supply chain could not be said to relate to the employment relationship.
h. In so far as a subcontract relationship is concerned the information relating to payment
rates and arrangements in all other environments would be considered commercially
confidential. The draft RSR Order requires this information be provided to customers.
There is no evidence that the value of this information to the contracted parties and the
effect disclosure may have on competition has been taken into account.
i. Section 8 (3) of the Road Safety Remuneration Act 2012 (Cwth) states that a road
transport contract may be in writing, oral, or partly in writing and partly oral. Under clause
7.1 of the draft RSR Order an employer or hirer must provide a road transport driver with a
written employment contract or written road transport contact (sic) covering the
employment or engagement of the road transport driver, prior to the road transport driver
commencing their employment or engagement with the employer or hirer. In effect the
draft RSR Order in its current form will remove the options available for contracts that
were contemplated by Parliament at the time the RSR Act was proclaimed. The Acts
Interpretation Act 1901 (Cwth) deals with the construction of instruments such as the draft
RSR Order. Clause 46 (1)(c) requires that instruments made under a statutory power are
to be read and construed subject to the enabling legislation as in force from time to time,
and so as not to exceed the power of the authority. It is argued that the removal of the
option to have verbal contracts or part verbal, part written exceeds the authority of the
Tribunal.
18. The need to reduce complexity and for any order to be simple and easy to understand
a. The proposed order is reasonably simple and easy to understand, however, its
implementation will increase complexity rather than reduce it. The act of agreeing to
transport livestock, grain, fertiliser etc. will become more complicated by the need to
develop a safe driving plan and consult other participants in the supply chain who may be
many and varied for any one trip.
b. Additional complexity will also arise from the requirement to have all contracts in writing.
The flexibility that has worked in contractors favour whereby the hirer increases payments
to compensate for unexpected conditions along the way will diminish as hirers will focus
on the prescriptive aspects of the order. The regular preparation of written documents to
accommodate the mobility within the rural transport sector will undoubtedly increase
business complexity.
19. The need to minimise the compliance burden on the road transport industry
a. The compliance burden on heavy vehicle transporters is immense. It includes fatigue
management, chain of responsibility, accreditation and the Fair Work Act. Livestock
transporters also have to demonstrate compliance with animal welfare provisions,
traceability and bio-security laws. Each of these management regimes requires significant
documentation and a robust audit trail. Businesses have already invested valuable time in
maintaining appropriate records and keeping up to date with requirements. For small
family businesses this is particularly difficult. The scope for integrating the requirements
of the draft RSR Order with other compliance systems will be limited for several reasons.
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Management systems that are regularly audited are deliberately maintained as discretely
as possible in order to reduce audit costs. Transport companies are subject to several
different inspection regimes and records are maintained in a manner that enables records
that may be required by an inspector exercising statutory functions to remove them
without excessive impact on the remainder of the businesses activities.
b. Given that the majority of trips undertaken by rural transporters in WA would exceed 500
kilometres the scale of the additional burden imposed by the proposed safe driving plan is
obvious particularly as participants in the supply chain must have some involvement with
the plan. The participants change daily and there could be as many as 15 participants for
each job multiplied by the number of vehicles in service.
c. It is common for a hirer to acquire the services of a sub contractor at short notice to assist
with excess work e.g loading a live export vessel, undertaking grain transfers. This hiring
could be for a single day only. The industry attempts to look after its own and share work
around wherever possible. Back loading is an important aspect of maximising use of
equipment and these arrangements are often made at very short notice. The requirement
to complete a written contract, specify a time limit, prepare a safe driving plan and consult
other participants in the supply chain would make this method of operating impractical.
The alternative is to cease using contractors and employ drivers. This would enable an
ongoing contract of employment but would result in increased use of casual employees
therefore less stability in the industry and less monetary reward overall. Interestingly the
Minister for Infrastructure and Transport, Hon Anthony Albanese MP said in his second
reading speech during the passage of the Road Safety Remuneration Act 2012 (Cwth)
that it “establishes a system that will assist road transport industry small businesses,
whilst ensuring that owner drivers maintain their status as independent contractors.”13
The LRTAWA contends that full implementation of the draft RSR Order will not have the
effect envisaged by the Minister.
20. PUBLICATION OF RESEARCH
a. Again in the Minister’s second reading speech on 23rd November 2011, the Minister for
Infrastructure and Transport made the clear commitment that the Tribunal's “approach will
be evidence-based and research-focused”. Accordingly The Tribunal must publish any
research undertaken or commissioned by the Tribunal for the purposes of determining
whether to make a road safety remuneration order or the terms in which any order should
be made, so that submissions can be made under section 24 addressing issues covered
by the research.
b. The research that is published on the Tribunal’s website relates to contractor driver rates
and costing models; and comparative schedules of remuneration and conditions. There is
no research to support the overall thrust of the draft RSR Order in so far as it relates to
the economic impact of the additional requirements on industry. Importantly there is not
research or data that links the initiatives in the draft RSR Order with an improvement in
safety in the industries that have been singled out for attention including the livestock and
bulk grain sector. We consider that an evidence based approach as promised by the
Minister requires reliable data to be compiled prior to an order being issued.
13
Commonwealth of Australia, Parliamentary Debates, House of Representatives Bills Road Safety Remuneration Bill 2011, Second
Reading Speech Wednesday, 23 November 2011
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Livestock & Rural Transport Association of Western Australia (inc)
21. PRESCRIPTIVE RATES
a. The LRTAWA supports the Tribunal’s approach of not providing prescriptive rates in the
draft RSR Order. There is already ample guidance and regulation to assist and monitor
industry with regard to rates.
22. CONCLUSION
a. The heavy vehicle transport industry is not homogeneous. A process of documentation
that may operate successfully in general freight will not necessarily operate efficiently in
rural road transport due to the logistics involved in transporting rural commodities.
b. Rural transport is characterised by small businesses with little scope for absorbing an
additional administrative burden.
c. It will be difficult to pass increased costs arising from higher compliance or inefficiencies
on to customers as they are price takers and sensitive to increases in their input costs.
d. The case for change within the terms expressed by the draft RSR Order has not been
explained and no evidence has been provided, therefore, those who are affected by it
and who will be required to implement it are unclear as to what issue is being addressed.
e. There is a plethora of existing legislation that includes many of the requirements
contemplated by the draft RSR Order and so there is considerable overlap that will lead
to confusion and increased complexity.
f.
There is a risk that the RSR Order if issued in its current form will intervene in the market
to the extent that it will introduce inefficiencies and change the way services are
delivered.
g. The LRTAWA recommends that if the Tribunal decides to issue the RSR Order,
consideration should be given to exempting transporters who are predominantly engaged
in transporting commodities for on farm primary production. If the Tribunal considers the
evidence exists to issue an order that covers rural transport a separate order should be
issued that takes the special circumstances of rural transport into account. This should
only be done after in depth analysis and site visits across all states.
h. Finally we are very grateful for the considerable opportunities provided by the Tribunal for
industry to comment on the proposal.
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ATTACHMENT A
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