Regulating Supply Chains to Protect Road Transport Workers: An Early Assessment of the Road Safety Remuneration Tribunal
| Author | Igor Nossar,Richard Johnstone,Michael Rawling |
| Published date | 01 September 2015 |
| Date | 01 September 2015 |
| DOI | http://doi.org/10.22145/flr.43.3.3 |
| Subject Matter | Article |
TRANSPORT WORKERS: AN EARLY ASSESSMENT OF THE
ROAD SAFETY REMUNERATION TRIBUNAL
Richard Johnstone∗, Igor Nossar∗∗ and Michael Rawling∗∗∗
ABSTRACT
The Road Safety Remuneration Act 2012 (Cth) (the Act) explicitly enables the Road Safety
Remuneration Tribunal to make orders that can impose binding requirements on all the
participants in the road transport supply chain, including consignors and consignees at
the apex of the chain, for the pay and safety of both employee and independent
contractor drivers. The tribunal is also specifically empowered to make enforceable
orders to reduce or remove remuneration related incentives and pressures that
contribute to unsafe work practices in the road transport industry. Recently the tribunal
handed down its first order. The article considers whether, and the degree to which, the
tribunal has been willing to exercise its explicit power to impose enforceable obligations
on consignors and consignees — such as large supermarket chains — at the apex of road
transport supply chains. It examines the substance and extent of the obligations imposed
by the tribunal, including whether the tribunal has exercised the full range of powers
vested in it by the Act. We contend that the tribunal’s first order primarily imposes
obligations on direct work providers and drivers without making large, powerful
consignors and consignees substantively responsible for driver pay and safety. We argue
that the tribunal’s first order could have more comprehensively fulfilled the objectives
of the Act by more directly addressing the root causes of low pay and poor safety in the
road transport industry.
I INTRODUCTION
A key feature of organisational arrangements in the contemporary Australian trucking
industry is the extensive use of contracting chains — what we will refer to in this article
as ‘supply chains’ — for the supply of road freight services. At the apex of many of these
supply chains are influential consignors and consignees, such as large supermarket
chains, department stores, and manufacturers and the firms to which manufactured
items are supplied. In a supply chain, the consignor, rather than transporting goods
∗ Queensland University of Technology, Australia. This paper reports on research undertaken
for an Australian Research Council funded project, Australian Supply Chain Regulation:
Practical Operation and Regulatory Effectiveness, DP120103162.
∗∗ Adjunct, Queensland University of Technology, Australia.
∗∗∗ University of Technology, Sydney, Australia.
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using its own truck driven by its own employees, contracts with a transport company
which in turn uses its own employee drivers, or subcontracts the driving work to an
owner driver, or, perhaps, to another transport company which itself sub-contracts the
work to an owner driver. Some road freight arrangements involve carting goods through
distribution centres where freight is unloaded and then loaded on to other trucks.
As this description of contracting arrangements shows, the major transport
companies that directly enter into contracts with consignors to haul their freight, or that
receive road transport work via an intermediary, are at least one step down the general
freight supply chain. As we discuss in the next section of this article, over recent decades
the bargaining power of transport companies relative to many of their client consignors
has weakened to the point that many transport companies have become the price taker
and the consignor the price-maker. Powerful consignors and consignees also have the
power to set other parameters within which work is undertaken by road transport
workers, including the maximum time available for delivery of goods.1 The transport
companies then need directly to engage both employee and contract owner drivers to
drive the trucks which carry the freight under arrangements that enable the transport
company to take its share of financial return. To ensure financial return, major transport
companies sometimes further contract out work to smaller transport company operators
who will then directly engage the road transport workers — either their own employees,
or owner drivers. The weight of the cumulative economic pressures from the top of the
chain is passed down the supply chain and induces intense competition between
employee drivers and owner drivers who frequently are compelled to accept work terms
and conditions dictated to them or fail to receive work at all.2
Thus, in the absence of preventive regulation, drivers at the bottom of the supply
chain — particularly owner drivers needing work to meet the expenses of owning a
truck — are compelled to accept low freight rates and unsustainable delivery timetables.
These, in turn, provide incentives to work longer hours — which can result in fatigue —
and to engage in hazardous work practices that compromise the health and safety of
drivers.3 The literature — which we discuss in the next section of the article — shows
how the use of elaborate, pyramid subcontracting results in reduced freight rates and
returns to drivers. It also demonstrates a strong link between low returns and client
demands for tight time schedules, long hours, and poor queuing practices that reduce
1 See Michael Quinlan, Report of Inquiry into Safety in the Long Haul Trucking Industry, Motor
Accidents Authority of New South Wales, (2001), 152-153; Re Transport Industry – Mutual
Responsibility for Road Safety (State) Award and Contract Determination (2006) 158 IR 17, 24; Igor
Nossar, ‘Consequential Amendments to OHS Amendment (Long Distance Road Freight
Transport) Regulation Draft, Textile Clothing and Footwear Union of Australia’ (Briefing
Paper 2004) 1.
2 Lance Wright and Michael Quinlan, ‘Safe Payments: Addressing the Underlying Causes of
Unsafe Practices in the Road Transport Industry’ (Final Report, National Transport Commission,
October 2008) 24–5.
3 See Michael Quinlan and Lance Wright, ‘Remuneration and Safety in the Australian Heavy
Vehicle Industry: A Review Undertaken for the National Transport Commission’ (National
Transport Commission, October 2008) which found at p 49 ‘that the overwhelming weight of
evidence indicates that commercial/industrial practices affecting road transport play a direct
and significant role in causing hazardous practices.’
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Regulating Supply Chains to Protect Road Transport Workers
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opportunities for drivers to rest.4 Intensification of these pressures in an already
competitive industry has resulted in unsafe and unhealthy work practices such as
excessive hours of work, increased use of kilometre or trip-based payment systems,
speeding, drug use (to combat fatigue) and cuts to maintenance.5
Over the past 15 years, Australian road transport and work health and safety
regulators have developed various regulatory provisions designed to address the health
and safety risks from supply chain pressures on drivers. These measures include the
‘chain of responsibility’ provisions of the heavy vehicle legislation, now to be found in
the Heavy Vehicle National Law,6 which sets out ‘a chain of responsibility’ for all parties
(including firms packing, loading and receiving goods) involved in road transport work
even if they have no direct role as a driver or transport operator.7 The aim of these
provisions is to make each party in the chain with the capacity to exercise control or
influence over any transport task equally responsible for compliance with the road
transport laws, including provisions for fatigue management requirements (Chapter 6
of the National Heavy Vehicle Law), breaches of speed limits (Chapter 5), and breaches
of mass, dimension, or loading requirements (Chapter 4). Further, in 2005, New South
Wales introduced the Occupational Health and Safety Amendment (Long Distance Truck
Driver Fatigue) Regulation 2005 (NSW), made under the Occupational Health and Safety Act
2000 (NSW). These provisions required large consignors, consignees and head carriers
to assess risks to employee drivers and owner drivers from fatigue in long haul driving
arrangements, and to develop a fatigue management plan to address identified risks.
The regulation was repealed at the end of 2011 when the Occupational Health and Safety
Act was replaced by the harmonised Work Health and safety Act 2011 (NSW).
In addition, since 1979 in NSW, rates and conditions of work for contractor drivers
have been provided for by ‘contract determinations’ (which are akin to industrial
awards) and ‘contract agreements’ (similar to union collective agreements).8 These
provisions are, however, confined to regulating the direct contract worker/hirer
arrangement and do not extend to regulate clients at the top of the transport supply
chain. Also, due to State jurisdictional limitations, they do not cover any road transport
4 Claire Mayhew and Michael Quinlan, ‘Economic Pressure, Multi-tiered Subcontracting and
Occupational Health and Safety in Australian Long Haul Trucking’ (2006) 28 Employee
Relations 212; Michael Quinlan, ‘Supply Chains and Networks’, (Safe Work Australia, July
2011) 5-6. See also Stephanie...
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