The Transport Workers Union and an association of employers in the road transport industry have filed an urgent application in the FWC that would require road transport businesses and their associated supply chains, including thousands of businesses ranging from national businesses to small family run organisations across a raft of sectors, to implement new contractual arrangements relating to fuel costs and to undertake weekly reviews of freight rates they pay to account for rising fuel costs.
"The Application urges the Commission to utilise radical new powers it was afforded during the last term of Parliament to regulate commercial arrangements between parties to Road Transport Contracts. This not only includes regulating the rates paid to 'owner drivers' and gig workers, but also the content of commercial contracts between larger road transport businesses and their customers," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"The application is a response to the economic shocks associated with the rising fuel costs resulting from conflict in the Middle East. In response the FWC commenced major proceedings late on Thursday afternoon, while many in industry were departing for the Easter Break, and an urgent hearing was convened this morning. Further proceedings will be conducted on Friday and Monday according to an expedited timetable.
"The application has been met by strong opposition from both Australian Industry Group as well as a range of road transport associations, broader industry associations and individual businesses, including major transport companies and retailers, despite many in industry only hearing about the developments during the Easter holidays.
"Businesses in the road transport industry, along with a select group of other sectors, have been at the coal face of the immediate impacts of the rapid rise in fuel costs but the impact will reverberate through the economy. It is crucial that industry participants share the impact of what will hopefully be short-term price rises. Pleasingly, we have already seen many parties in industry navigating the current crisis constructively and responsibly. There have been numerous high-profile examples of recognition by major supply chain participants and large road transport businesses that they need to look at temporary measures such as fuel levies, but what is clear is that a 'one size fits all' approach to these issues can't be taken.
"The union-proposed regulation of almost the entire Australian transport supply chain would be a profound and unpreceded intervention in the Australian economy by an industrial tribunal that ordinarily sets rates of pay and conditions for employees.
"While the union's claim may be well intended, it is a deeply misguided, confusingly complex and frankly unworkable proposal that risks visiting a raft of unintended but sadly entirely foreseeable adverse consequences on the economy, a myriad of businesses already struggling with growing economic challenges and disruptions and, ultimately, on the very road transport businesses and road transport contractors the union want to assist.
"The proposal would swamp businesses in a new and confusing layer of administrative burden and red tape. It fails to appreciate that there simply won't be any way for many of the customers of road transport businesses to accurately assess the fuel costs of transport companies they contract with, let alone have the resources to do this on a weekly basis.
"There are a raft of complex and variable considerations that go into determining the freight rates road transport businesses charge. There is broad concern in industry that the union application will interfere with arrangements already implemented in industry, such as agreed fuel levies or temporary uplifts in rates that are working well.
"The application has justifiably revived fears that the proceedings will result in a repeat of the disaster created by the now abolished Road Safety Remuneration Tribunal. In late 2015, that Tribunal implemented controversial orders setting minimum rates of pay for owner drivers in response to claims from the TWU and despite industry objection. Those orders fundamentally misjudged what the rates should be and looked set to price vast numbers of owner drivers and road transport businesses out of work, until the Government stepped in and urgently legislated to abolish the Tribunal and its flawed orders. There is an inevitable risk that the current proceedings will result in a similar outcome if the application is approved by the Commission.
"Many in industry are understandably anxious that if the Commission issues orders based on the TWU's application, it will inevitably cause large road transport businesses or major clients who currently engage large number of road transport businesses or contractors to minimise the risks and impacts of the orders by limiting their engagement of smaller trucking companies or owner drivers.
"At the very least, it is likely to put road transport businesses that engage contractor drivers covered by the proposed order at a major competitive disadvantage to those that use employee drivers.
"At the same time as these urgent proceedings are being held, the Minister for Employment and Workplace Relations, Amanda Rishworth has requested feedback on whether to declare the TWU proposal an 'emergency application'. Industry has been given a little over a day to respond. It will be crucial that the Minister exercises her discretion carefully.
"It would be a mistake for the Government to endorse an ill-considered application that will at best distract industry from dealing with a crisis and at worst, create a new nightmare for industry to navigate.
"Neither the Minister nor Fair Work Commission should rubber stamp this fundamentally flawed proposal," Mr Willox said.
