VIC Govt Introduces Bill To Implement Changes From Review Of Owner Drivers and Forestry Contractors

Tuesday 7 May 2019 @ 12.31 p.m. | Industrial Law | Legal Research

On 30 April 2019, the Owner Drivers and Forestry Contractors Amendment Bill 2019 (VIC) (‘the Bill’) was introduced to the Victorian Legislative Assembly by the Minister for Industrial Relations, Tim Pallas. It aims to amend various acts in order to provide for safer and fairer work for owner drivers and forestry contractors.

The Amendments

The Bill follows a 2016 review of the Owner Drivers and Forestry Contractors Act 2005 (VIC) (‘the Act’). The Act aims to regulate the relationship between owner drivers and contractors and to allow them to assess if the contractor’s offers were economically sustainable for their business. Owner drivers are small businesses which own and operate one to three delivery vehicles. The Act also established a framework for the regulation of contracts between eligible drivers and hirers, and also set out legal requirements on the provision of information in order to assist the business.

The review of the Act and the Owner Drivers and Forestry Contractors Regulations 2006 (VIC) (‘the Regulations’) was announced by the Victorian Government on 16 November 2016. The review explored possible changes that should be made to improve the position of owner drivers and forestry contractors in Victoria, while remaining competitive in their industry. The proposals in this Bill are based on the 25 confidential submissions received and the discussion and consultation that followed.

Minister Pallas explains in his second reading speech:

“It is proposed that the purpose of the Act be amended to include the promotion of industry best practice, education and training. An associated amendment is proposed to the functions of the Transport and Forestry Industry Councils to specify that they can provide advice and make recommendations to the Minister on promoting industry best practice, education and training for owner drivers and forestry contractors.”

One of the main amendments of the Bill is to specifically include the possibility of arbitration as an alternative dispute resolution (‘ADR’) method. Under the current Act, parties can request mediation or another type of ADR through the Small Business Commissioner (‘the Commissioner’). However, with this amendment, the Commissioner is given scope to first attempt mediation, before then given the option to proceeding to arbitration. This amendment was aimed to introduce a faster, more economical way of resolving contracts, whilst still maintaining confidentiality and enforceability. The amendments also further provides that the Commercial Arbitration Act 2011 (VIC) does not apply to arbitration conducted under these new provisions.

The Bill also proposes the introduction of a compliance and enforcement framework, as well as penalties for failure to comply with mandatory requirements of the Act. The Bill proposes penalties for non-compliance particularly for the following provisions of the Act:

  • Failure to provide the Information Booklet
  • Failure to provide a relevant rate and cost schedule
  • Failure to provide a contractor with a written contract
  • Failure to provide the notice of termination or payment in lieu of this notice

These penalties are aimed to provide incentives for hirers to comply. The Bill also proposes investigative powers to authorised officers, including power to require hirers to produce documents for evidence and to enter premises with consent of the occupier.

Further amendments proposed are:

  • The addition of the definition of freight broker, in order to clarify contractors employed through third-party contracting platforms
  • Hirers can provide contractors with information electronically
  • Contracts under the Act will require payment of invoices within 30 days of receipt
  • Contractors can be covered by the same terms and conditions of an existing contract which has been jointly negotiated, however, contractors can also opt to negotiate their own contractual arrangements
  • The inclusion of tip truck contractors to the Act

The Minister concluded in his second reading speech:

“The key benefit that will result from these amendments is that they will increase compliance with the mandatory provisions of the Act. This will help ensure owner drivers and forestry contractors can accurately assess the overhead costs of operating their businesses which will mean they are better placed to determine whether an offer will fully cover their operating costs, provide a return for their own labour and a return on business investment.”

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