The Australian Trucking Association has called for the Fair Work Commission to be granted the powers to set freight industry contract standards, but not to set freight rates
The vexed issue of transport businesses being locked into contracts that leave no room for movement when it comes to recovering unforeseen costs is high on the agenda for government, unions and industry groups.
Weighing into the space today the Australian Trucking Association (ATA) released a detailed plan as to how it believes the Fair Work Commission could be activated to participate in the space to improve the quality of transport contracts and weed out those that lack fairness.
ATA chair David Smith says the group’s plan would deliver fair contracts for the trucking industry, while still encouraging businesses to innovate and offer business efficiencies to their customers.
“Under our plan, the Fair Work Commission would be able to make orders setting road transport contract standards but would not have the ability to set freight rates,” David says.
“The commission’s orders would apply to all trucking businesses and their customers. There would not be a two-tiered system of rates or standards, which is what occurred under the Road Safety Remuneration Tribunal.
“The commission or a court would be able to determine that a road transport contract term was unfair if the parties were unable to demonstrate that the term had regard to the costs faced by the business.
“In making the determination, however, the commission or court would consider the ability of businesses to purchase goods, services and finance at different rates, if the costs faced by the business were reasonable and if the business had chosen to spread its costs over multiple customers or more than one leg of a multi-leg journey.”
The ATA attached a copy of their plan, which was delivered to the Federal Government last week, to today’s industry newsletter. Its details are listed below:
ATA’S PROPOSED COMMISSION / COURT POWERS IN RELATION TO CONTRACTS AND COST SCHEDULES
1. The Commission should not have the ability to make orders setting freight rates for road transport businesses, however constituted.
Ability to set contract standards
2. The Commission should be able to make orders setting road transport contract standards, including in relation to—
a. the adoption of mandatory formulas for setting and adjusting fuel levies, without setting a specific percentage rate
b. payment terms
c. one way termination for convenience clauses
d. any other contract terms the Commission considers appropriate, subject to (1) and (4).
Determination that a contract is unfair
3. The Commission or a court should be able to determine that a road transport contract term is unfair if, under all the circumstances, the parties are unable to demonstrate that a contract term has regard to the costs faced by the business, including—
a. the cost of fuel or energy
b. financing or depreciation costs for the vehicles involved
c. employee or contractor remuneration
d. servicing and maintenance in accordance with the vehicle manufacturer’s service schedules
e. specialised equipment
f. tyres and parts
h. government taxes and charges
i. toll, port, weighbridge and washout fees
j. accreditation and auditing fees
k. telematics charges
l. customer compliance costs
m. any other costs the Commission or court considers relevant.
4. In making a determination under (3), the Commission or court should be required to consider—
a. the ability of businesses to purchase goods, services and finance at different rates
b. the financial structure of the business
c. if the costs faced by the business are reasonable compared to the costs faced by a well-run business of similar size and management skill
d. if the business has chosen to spread costs across the whole of a contract period, multiple customers or more than one leg of a multi-leg journey
e. if the business is offering transport services as part of a broader contract package (for example, a manufacturer may choose to offer free or discounted transport as part of a broader supply contract)
Publication of indicative cost schedules
5. The Commission should be able to publish indicative cost schedules to assist businesses to comply with (3).
6. To develop cost schedules, the Commission should be required to constitute an Expert Panel under new provisions to be added to s 620 of the Act.