NSW Government moves the dial: New rules for owner-drivers and GIG operators

Who should read this?

If you:

• directly or indirectly engage “owner-drivers”
• engage small transport fleet operators with three vehicles or less
• are part of a supply chain involving “owner-drivers”
• operate a gig-platform
• operate ride-share.

What has changed?

Chapter 6 of the NSW Industrial Relations Act has been amended to:

• Give powers to the NSW Industrial Relations Commission to regulate supply chains
• Give powers to the NSW Industrial Relations Commission to regulate gig-platforms and ride share
• Change the coverage of owner-driver regulation to include small fleets with up to three vehicles (this was initially proposed as a new five vehicle threshold)
• Allow the NSW Industrial Commission to declare a fleet operator to be regulated by Chapter 6 legislation in certain circumstances
• Change how Contract Agreements can be terminated
• Ensure Contract Determinations and agreements explain how tolls are reimbursed and how routes can be directed
• Introduce increased compliance obligations
• Ensure industrial instruments extend to successors
• Streamline dispute resolution
• Expand and clarify the Industrial Relations Commission powers in making Contract Determinations
• Introduce specific objects for Chapter 6
• Remove historical exemptions stopping certain industries for being regulated.

Why has the Government done this?

The Government has made these changes to make sure that Chapter 6 regulation which has operated for over 50 years remains contemporary in light of recent changes to the Fair Work Act concerning owner-driver, supply chain and gig-platform regulation.

It also wants to ensure that Chapter 6 continues to play an important role in the regulation of owner-drivers in NSW and now seeks to extend this to micro-fleet operators (up to three vehicles similar to Victoria).

The changes may require you  to consider:

• your fleet mix strategy
• your supply chain arrangements
• your use of low-cost fleet operators
• whether you restructure your delivery business model
• if you were previously excluded from Chapter 6 regulation how you will restructure your operating and/or business model now you are captured by regulation
• if you are negotiating a new Contract Agreement whether this form of instrument is now less attractive compared to a Contract Determination
• if you are negotiating a new Contract Determination how its contents compare to the matters the Commission must now consider in making a Contract Determination.

ABLA has been instrumental in negotiating important changes to the original Bill to better protect business. If your organisation would like a briefing on these changes with myself, please get in touch to book a suitable time at info@ablawyers.com.au or 1300 565 846”.

Nigel Ward

When do these changes start?

These changes start at different times, some start:

• Immediately (once royal assent occurs) which we expect to be imminent
• 6 months after royal assent
• 18 months after royal assent

Detailed Changes

What changes start upon royal assent?

New Objects

Chapter 6 will operate with new objects promoting fair and efficient arrangements generally and within contractual chains (supply chains) for contracts of carriage and contracts of bailment.

Amplification of Jurisdiction to make Contract Determinations

The Commission must now consider including various terms when making a Contract Determination. These include:

• rates of remuneration on a proper cost recovery basis, inclusive of a fair return on financial risk
• record keeping
• training and skill development
• adequate consultation and dispute resolution
• ensuring access to proper representation
• provisions dealing with the attraction and retention of owner-drivers.

Regulation of Contractual Chains

The Commission (constituted by a Presidential member) can now regulate contractual supply chains in relation to contracts of carriage and make a Contract Determination in relation to remuneration and other matters in the contractual chain provided that in doing this the Commission must not interfere with reasonable commercial arrangements of parties to a contract or arrangement in a contractual chain.

Unfair Dismissal

The Commission’s existing ‘unfair dismissal’ powers concerning contracts of carriage and bailment have been extended to include parts of such a contract (where the Carrier might operate more than one vehicle) but this expressly excludes gig-platform deactivation challenges under the Fair Work Act.

Successors

The Commission when making a Contract Determination can now provide that it applies to any successor company to the original principal contractor.

Contract Agreements will now apply to successors to any Principal Contractor.

Consideration of Fair Work Minimum Standard Orders

The Commission must have regard to activity in the Fair Work Commission concerning the making of applications for Minimum Standard Orders.

Assistance with Bargaining

The Commission has been provided with additional proactive powers to assist parties negotiating Contract Agreements to promote ‘good faith bargaining’ and reasonable conduct.

This will allow the Commission to become involved in both the substance of any negotiations as well as the process.

Termination of Contract Agreements

Contract Agreements can no longer be unilaterally terminated. They can continue to be terminated by agreement at any time but otherwise will remain in force.

If a party wants to end a Contract Agreement and the other party(s) do not, it can apply to the Commission for a Contract Determination to replace the Contract Agreement if it is appropriate to do so.

Dispute Resolution

Dispute resolution powers have been streamlined to:

• make it easier to notify a dispute
• allow the Commission to deal with the immediate issue (such as strike action) as well as any underlying issue
• allow the Commission to make orders on contractual chain participants provided that in doing this the Commission must not interfere with reasonable commercial arrangements of parties to a contract or arrangement in a contractual chain.

Involvement in Contraventions

The legislation has now extended persons liable for contravening the legislation or an instrument made under it to include a person involved in the contravention. This includes persons aiding, abetting, counselling, procuring the contravention, as well as those knowingly concerned in it.

Tolls and Routes

Contract Determinations and Contract Agreements must include provisions dealing with:

• how tolls will be reimbursed
• the taking of routes to affect a delivery.

What changes start six months after royal assent?

Extended Coverage of the Legislation

A series of historical exemptions from the legislation will cease to apply:

• the carriage of mail by or on behalf of Australia Post will become covered by the legislation
• the carriage of bread, milk or cream for sale or delivery for sale will become covered by the legislation
• the carriage of goods that are to be sold pursuant to orders solicited during the carriage of the goods will be covered by the legislation.

Extension to three Vehicles

The current definition of a contract of carriage will be extended to circumstances where the contract carrier operates up to three vehicles, provided that the carrier principal (sole trader, partner or director etc) drives one of them.

Absence of carrier principal (sole trader, partner, director etc)

The changes now allow the carrier principal to be absent for driving the vehicle in more circumstances than was previously the case (this is not to be confused with withdrawing the vehicle from service):

• absences specified in Contract Determinations and Contract Agreements
• being sick
• annual leave
• other reasonable unavailability.

Savings Provisions

Existing Contract Determinations or contracts agreements will not immediately apply to carriers covered by the extended scope of the Act.

No pre-existing Contract Determination or Contract Agreement will apply to those persons captured by the extended coverage of the Act until those instruments are varied to specifically do this.

This includes the removal of historical exemptions and the extension to three vehicles.

What changes start 18 months after royal assent?

Extended Coverage of the Legislation

A series of historical exemptions from the legislation will cease to apply:

• carriage that is made in the ordinary course of business for the carriage of packaged goods for different principal contractors by the use of the same motor vehicle or bicycle
• the delivery of meals by couriers to homes or other premises for consumption.

At this point the only remaining exemptions will be for common carriers and primary producers and primary production.

Declaration Powers

The Commission constituted by a Presidential member can declare a person to be performing a contract of carriage (and thus regulated by the jurisdiction) having regard to a number of issues (bargaining power, whether taken as a whole the terms are reasonable etc).

If a declaration is made, any pre-existing Contract Determination or Contract Agreement will not apply to the persons subject to the declaration.

Gig Worker Contracts

The Commission may regulate gig delivery workers engaged through a digital labour platform as well as a person providing a booking service within the meaning of the Point-to-Point Transport (Taxi and Hire Vehicles) Act 2016 (ride share).

This could see Contract Determination enforceable standards applying to platform delivery workers and ride share workers in NSW.

If you have any concerns or questions about how this applies to your business, please get in touch at info@ablawyers.com.au or 1300 565 846. ABLA will continue to keep you informed as this legislation unfolds.