TWU Launch First Fair Work Minimum Standards Application for Road Transport Workers

On 28 August 2024, the Transport Workers Union (TWU) filed three applications seeking minimum pay and conditions standards for thousands of contractors working in the road transport industry.

What are the applications seeking to cover?

The applications for ‘Minimum Standards Orders’ seek enforceable minimum pay and conditions for:

1. contractors delivering food and drinks through digital online platforms (eg Uber Eats or Menulog) (Food Delivery Gig Workers) and
2. contractors delivering goods or wares from transportation-hubs, logistics centres, distribution facilities, warehouses, storage facilities and other similar locations to customers (Delivery Contractors). 

These applications come just two days after new Fair Work road transport laws took effect.

How did we get here?

The Closing Loopholes Legislation introduced new powers for the Fair Work Commission (FWC) in relation to certain contractors who were traditionally outside of their jurisdiction (Regulated Workers).

Whether a worker is a Regulated Worker will depend on the business structure that they operate under and who actually performs the work.

The new powers allow the FWC to make Minimum Standards Orders, setting enforceable terms and conditions of engagement for Regulated Workers.

More information on these changes (including an explanation of who is a Regulated Worker) can be found in our article published in February 2024.

What is the TWU seeking?

In summary, the TWU’s three applications seek:

• Enforceable minimum rates for Delivery Contractors and Food Delivery Gig Workers (those rates yet to be identified), calculated to ensure cost recovery for the expenses arising from vehicles (motor vehicle, motorcycle, scooters or bicycles), equipment and labour costs involved in delivery work.
• Safety-net guarantees that, after cost-recovery, workers receive at least the equivalent of modern award employee rates.
• Terms which allow for adjustments to minimum safety net rates to accommodate fluctuations in fuel costs.
• Reconciliation obligations to ensure compliance with a minimum safety net.
• Terms requiring superannuation to be paid to workers.
• Terms requiring the provision of P.P.E.
• Terms requiring Digital platform operators to obtain personal injury insurance for Food Delivery Gig Workers.
• Terms requiring Blue Cards for all workers.
• Terms requiring four weeks unpaid annual leave and ten days unpaid personal leave for Delivery Contractors and Food Delivery Gig Workers.
• Terms requiring the taking of breaks (including paid rest breaks).
• Weekly payment obligations for Delivery Contractors and Food Delivery Gig Workers.
• Consultation obligations and dispute terms.
• Terms entitling workers to a period of notice of termination (or payment in lieu) and reasons for termination (including the name of any decision maker).
• Terms requiring Digital platforms to advertise and facilitate Food Delivery Gig Workers becoming members of the TWU.
• Terms providing for Delegates Rights.
• Terms requiring the keeping and provision of pay and compliance records.
• Terms requiring Digital platforms to provide workers with information about the supply of available work and operation of any relevant algorithms which determine the distribution of work.

For principals in NSW, much of the above will look similar to the structure of a ‘Contract Determination’, a system of regulation already existing in the NSW ‘Owner Driver Jurisdiction’.¹

Critically, the two applications for Delivery Contractors do not appear to seek minimum pay rates for vehicles over 3 Tonnes, thereby excluding heavier transport.

Where to from here?

The Fair Work Act (FWA) requires that the making of a Road Transport Minimum Standards Order:  

• involves genuine engagement with the parties covered by it 
• involves consultation with the newly created Road Transport Advisory Group 
• must have regard to the commercial realities of the road transport industry 
• must not ‘unduly affect’ the competitiveness or viability of owner drivers. 

Now that the first applications have been filed, the process for making a Minimum Standards Order is as follows: 

• The Fair Work Commission will likely seek further written submissions about the proposals and/or conduct a public hearing.
• The Fair Work Commission will then decide whether to publish a ‘notice of intent’ and a Draft Order it proposes to make.
• Interested parties must then be given a reasonable opportunity to respond. 
• The Commission may then hold (but is not required to hold) a hearing in relation to the draft Minimum Standards Order. 
• After consultation, the Minimum Standards Order must then be published or withdrawn.

In the ordinary course, a Road Transport Minimum Standards Order applying to Regulated Road Transport Contractors can only take effect 12 months after a notice of intent is published. A Minimum Standards Order applying to the ‘Gig Workers’ caught by the TWU’s claim may take effect earlier than that, although adequate consultation would still be required.

What’s next?

Although recent parliamentary reforms mean that it is inevitable that some form of further regulation will be imposed on the transport industry, the process required by the FW Act means that there is considerable work to be done before any new enforceable standards will take effect.

The Applications of the TWU will likely give rise to significant opportunities for further submissions and hearings, and the statutory time limits mean that there should effectively be a 12-month transition period for any new enforceable standard for Delivery Contractors.

Given the obligations imposed by the FW Act, Australian Business Lawyers & Advisors anticipates extensive consultation with industry about any potential new standards. 

ABLA has a leading industrial practice in Road Transport and anticipates playing an important role in the hearing to come. 

We are pleased to share our insight and update clients on the specific details of the changes and the impact these changes are likely to have on businesses. 

Please share this article with others in your business and encourage them to sign up to our mailing list for further updates.

If you have any questions about the process from here, please reach out at info@ablawyers.com.au.

¹     For more information see Arndt, J, Izzo, I & Ward, N 2003, Owner Driver Law in Australia, 1st edn, Law Book Co of Australasia.)