Owner Drivers and Forestry Contractors Amendment Bill 2019

18 June 2019

I am so pleased to rise and speak in favour of the Owner Drivers and Forestry Contractors Amendment Bill 2019. A Bill reflecting the changing nature of industry, commerce and workplace relations in the Digital Age. These changes will ensure the protection of hardworking Victorians operating their own small business as owner-drivers in the transport industry, and those working as contractors harvesting and haulage contractors in the forestry industry.

I would like to acknowledge the dedicated members of the Transport Workers Union and their advocacy on behalf of their members that has helped make this bill possible. I have witnessed firsthand their tireless efforts and ongoing commitment to the Safe Rates campaign, where the TWU have continually highlighted the importance of reform and the need for action on issues this bill will address. We all have a collective responsibility in this place to ensure the people we represent are working under fair and safe conditions, free from exploitation.

I also want to acknowledge the efforts undertaken by the Honourable Member for Sydenham, who oversaw as the Minister for Industrial Relations in the previous government the Owner-Drivers and Forestry Contractors Review and the Victorian inquiry into Labour Hire and Insecure Work. This bill is a testament to the dedication and energy that both the Honourable Member and her team put into the future of Victorian workers regardless of the industry they work in. It would also be remiss of me not to mention the Honourable Member’s role in establishing Wage Inspectorate Victoria, which this bill grants compliance and enforcement oversight to with regard to sections of the transport industry.

The Bracks Government first brought in the Owner Drivers and Forestry Contractors Act in 2005, and to many that may seem not a long time ago, but in reality much has changed in the past 14 years. We have seen the digital age take hold, completely transforming our communities, our industries and the way this economy works. More subtle amongst this transformation has been a change in the balance of power affecting working people, and let me say that when our laws and our regulations fail to keep up with the economic conditions of the time, our markets, our industries, our people and our economy risk falling behind, unable to reach the equilibrium of their full potential. We soon see market failures, and I cannot emphasise it enough when I say market failures are the only thing trickling down. We see this now with our owner-drivers working under subpar conditions—conditions that much of the time fail to take into account tangible operating costs and the intangible ripple on-costs of fatigue and overwork. This affects thousands and thousands of small businesses across Victoria, the owner-drivers operating these businesses and their families, who are just trying to make ends meet. That is without even mentioning the flow-on effects to other businesses caused by the shrinking of disposable incomes.

Before the Andrews government first introduced this bill last year, it was estimated that there was a huge amount of pay and productivity lost by small businesses. Which is why this government is committed to ensuring that working conditions are improved, that owner-drivers and small business owners are profitable and productive and that the balance of power is shifted to where it is fair and equitable, so those operating a small business get a fair and reasonable return on their hard work and investment.
As it stands, owner-drivers are responsible for the maintenance of their own vehicles and the running of their own businesses. A fair and reasonable expectation in the modern digital economy, there is a demand for their service—a service they are willing to provide.
In these circumstances, though, we are seeing an imbalance of power that has taken root due to a lack of information and understanding. Owner-drivers and forestry contractors are not trained in accounting or contract law or even really in how to operate a small business. This makes getting a full picture of the costs involved in running their businesses difficult to obtain. Because operating costs do not just factor in the cost of fuel in getting from point A to B. Insurance and depreciation are just two examples of costs that are relevant for an owner-driver to determine how much they are really earning for a job.

This bill will play a significant role in remedying this by ensuring that owner-drivers and forestry contractors are provided with the information they need to understand their legal rights, their obligations and the profitability a job could yield. By mandating that hirers provide owner-drivers and contractors with a copy of applicable rates, a cost schedule for their vehicle class and an information booklet at least three days before entering into a contract – individuals will have the knowledge to make informed decisions about what their time and their labour is worth. They will be equipped to assess the overhead costs of their business with a better view of what is and what is not profitable.

The risks of business failure, financial hardship and insolvency are all too real for small business owners, which is why this bill legislates a 30-day period in which invoices must be paid. As I have already mentioned, there are a lot of costs that come with operating a small business with your own vehicle. There is maintenance, fuel, repairs, insurance, depreciation et cetera. So, it is understandable that many owner-drivers enter into serviceable debts to keep their vehicles up and running. Serviceable debts are standard practice for small businesses in general, so why should it be any different for owner-drivers? Now, problems arise from this, as they do for any business, and that is when revenue and cash flow fail to keep up with debt repayments, because revenue can look really good on paper but if invoices are not paid on time it can throw cash flow and the balance sheet of a small business completely out of whack. This bill guarantees adequate breathing space so owner-drivers can finish a contract and get paid on time, so they can pay what they owe.

What about road safety? Well, we talk about it all the time—about the Transport Accident Commission and being careful over long weekends—but many so often forget about the transport workers. Part of what brought this act into existence under the Bracks Government was the coroner’s investigation into tragic incidents that had occurred within this industry. As I keep saying, there is an imbalance of power between owner-drivers and those contracting them for work, and when you factor in prime contractors and subcontractors, there is very little bargaining power left, which can result in very, very dangerous outcomes. Many drivers work some of the longest hours on our roads; they are usually up before dawn. We know for a fact that driving long hours increases fatigue significantly and subsequently results in a much higher risk of accidents. By giving people information that they need to assess the profitability of a contract, they can spend less time on the road working themselves simply to cover the operating costs of their business.

Another important aspect of this bill is of course compliance, by establishing the proper framework and the introduction of penalties for those failing to comply with the mandatory requirements. Wage Inspectorate Victoria will be provided with funding of up to $5.5 million to accommodate new powers for enforcement, and this will allow the inspectorate to monitor compliance with this act and with new regulatory requirements. New penalties will be introduced for the proposed criminal offences, ranging from 25 penalty units or around $4000 for a body corporate down to around $800 in any other case. Our workers and drivers deserve no less, as these protections help deter misconduct in the industry. The bill also provides for arbitration measures for contractor-driver disputes, allowing them by consent, to seek binding resolutions from the Victorian Small Business Commission, relieving some of the pressure on VCAT and giving businesses and drivers an easier avenue for dispute resolution.

I am also pleased that for the first time this bill will give the same protections to tip truck owner-drivers and give their owner-drivers the same benefits as other drivers covered by this act. I am proud to say that the Andrews government recognises the importance of tip truck workers and the hard work they contribute to the Victorian economy. That is why last year the government made it a priority to ensure that they received mandatory minimum pay rates and improved work standards. This bill continues that work and enforces further protections for tip truck owner-drivers in their dealings with contractors by placing them on an equal footing with owner-drivers and forestry contractors.

The importance of truck drivers and the work that they do in Victoria’s economy cannot be overstated: 1 in 33 men are truck drivers nationwide, comprising 3 per cent of all male workers, and that is without even considering the growing number of women that have joined the transport industry. The 2005 Owner Drivers and Forestry Contractors Act did not foresee the modern economy; the likes of Uber Eats and Deliveroo did not exist. So for the modern protections these amendments offer to modern working Victorians, I commend the bill to the house.