New Rights for Owner Drivers
How the Owner Drivers and Forestry Contractors Act will affect you
What is the purpose of the Act?
The Owner Drivers and Forestry Contractors Act 2005 aims to improve the position of small businesses in the transport and forestry industries by providing them with the information and support essential to run a successful business. The Act also provides a framework for resolving disputes in a timely and cost effective manner. The main parts of the Act commenced on 1 December 2006.
Who does the Act apply to?
The Act applies to owner driver businesses (including sole traders, companies or partnerships) that operate up to a maximum of three vehicles in providing services in transporting goods. The Act only applies where the owner of the business also drives one of the vehicles.
The Act covers owner drivers involved in interstate operations where a substantial part of the services are performed within Victoria.
The requirement to provide contractors with an Information Booklet and the applicable rates and costs schedule only apply to contractors whose engagements are ongoing, or where services are performed for more than 30 days in any three month period. The requirement to give a minimum period of notice only applies where the engagement proceeds beyond three months.
What is the Code of Practice?
The Owner Drivers and Forestry Contractors Code of Practice came into effect on 1 December 2006. The Code contains some mandatory requirements and also sets out guidance on industry best practice.
In addition, the Code can be taken into account by the Victorian Civil and Administrative Tribunal (VCAT) in determining whether unconscionable conduct has occurred, or whether contract terms are unjust.
How does the Act ensure contractors are well informed?
The Act sets out a number of requirements that will assist contractors to improve their business skills and to better understand their cost structures and their contracts.
The Information Booklet
The Information Booklets are designed to provide a comprehensive and convenient source of information to owner drivers and forestry contractors to assist them to run their businesses safely and profitably.
The Information Booklet provides information on:
- Rights and responsibilities under the Act and Code;
- Information on establishing and running a small business;
- Sources of advice and assistance; and
- Regulation of the industry and health and safety
Rates and Costs Schedules
The Rates and Costs Schedules give contractors information on:
- The typical running costs of the business
This information is based on the kind of vehicle or equipment provided under the contract. An example is provided based on a typical business using that type of vehicle, with an explanation of how the costs might vary for an individual business. The model can be used by the contractor to calculate their own individual operating costs.
- The rates typically paid to employees performing similar work
This will assist the contractor to decide a reasonable rate for their own labour.
The Schedules do not set minimum rates that must be paid.
Instead they provide contractors and hirers with information about the typical operating costs applying to their business. Having this information before entering a contract will assist contractors to assess whether they should accept the rates being offered and allow better information negotiations.
It is a requirement of the Act that from 1 December 2006 the Information Booklet and the applicable Rates and Costs Schedule be given by hirers to all new contractors three days before they sign a contract. The requirement also applies to tender processes and to freight brokers.
Transitional provisions in Part 10 of the Act mean that hirers must provide all current contractors who are engaged as at 1 December 2006 with a copy of the Information Booklet and the applicable rates and costs schedule.
Contracts must be in writing, and specify minimum hours or income
The Act requires that all on-going engagements must be in writing, and the contract must specify minimum level of income or number of hours of work. The minimum could be zero but on the basis that the parties understand the offer being made, they can seek to negotiate the level of security and certainty they require.
The Transport Industry Council has prepared a generic non-industry specific model contract to assist both hirers and contractors to develop written contracts.
If the hirer breaches the Act by not giving either the Information Booklet or the Rates and Costs Schedules to the contractor as required by the Act, then the contractor can make a claim to be paid for their labour and profit at an appropriate and fair rate, as determine by VCAT.
Information extracted from Industrial Relations Victoria documentation.
www.irv.vic.gov.au
CMPA RESPONSE TO THE OWNER DRIVERS AND FORESTRY CONTRACTORS ACT
Over the last two years, the CMPA has been working with the State government to establish how industry will be affected by the Owner Drivers & Forestry Contractors Act, and what you will need to do to be compliant.
Recent CMPA Forum
The CMPA held a forum on Wednesday 14 February to provide Members with a clear understanding of what the Owner Drivers & Forestry Contractors Act entails and how to manage its implementation.
The forum included the release of a standard form contract required under the Act as developed by the CMPA specifically for industry. A full report from the forum will be published next issue.
The CMPA Contract
The “Conditions of Contract for Hiring Cartage Contractors to Transport Quarry Materials” is a contract developed for Members in response to obligations under the Owner Drivers & Forestry Contractors Act.
The contract enables members to easily implement an agreement between the hirers (i.e. quarry) and owner drivers (i.e. cartage contractor).
Electronic editions of the contract (designed to allow quick completion) are available to Members at a cost of $200 for non-members, and only $90 for CMPA Members. This document cost the CMPA almost $20,000 to produce.
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