Tony Sheldon, 31 March 2016

The National Secretary of the TWU Tony Sheldon has written the following response to Robert Gottliebsen. The response refers to the National Road Transport Association which has put out its response, at bottom, to the TWU statements.

There is an ultimate irony in the arguments of those opposing the first Order on safe rates by the Road Safety Remuneration Tribunal. Every doomsday scenario put forward as a reason for the Order not to go ahead is sadly already happening.

Take bankruptcies. The argument goes 35,000 will go out of business overnight. No evidence has been forward to back this up. Yet here is a real statistic: transport operators have one of the highest rates of insolvencies of any industry and small firms of five full time employees or less are the most likely of these to go bankrupt.

In the financial year to June 2015, there were 275 insolvencies among these small operators. In the financial year before that there were 548 insolvencies, with many still being hit with the effects of the GFC. The biggest reason for the insolvencies was inadequate cash flow. A problem with businesses going to the wall? We certainly already have one, so surely we need to urgently do something about it?

Or what about the notion that owner drivers will be undercut?

Last month an incident showed exactly how badly operators and owner drivers are already being undercut. Two truck drivers on temporary visas held traffic up at Sydney¹s M5 airport tunnel for several hours. They had taken a wrong turn and found themselves heading for a tunnel whose height they would not meet. The drivers were unable to reverse the truck or unhitch their trailer. They were untrained, illegally driving and, most probably, exploited. We filed a dispute notice against the company whose truck they were driving, Scott’s Transport. This is still ongoing with our focus on what is going on in Scott’s supply chain that is leading to untrained drivers being employed to drive their trucks?

Another catastrophe being reported to hit the industry when the Order comes in is an increase in suicides. This is sadly already a grave problem among truck drivers with an analysis by the Victorian coroner’s court last year showing drivers had the highest number of suicides between 2008 and 2014. During that period 53 truck drivers took their lives. Maybe it is time to address the fundamental problems of our industry?

We certainly believe so. For decades this industry has limped along with owner drivers expected to work effectively for free for large parts of their day. They are forced to work on low margins and drive their trucks and themselves into the ground. A PwC analysis on the 2006 census on the regulatory impact of the Road Safety Remuneration Bill shows 29 per cent of owner drivers are underpaid. The analysis shows their average income is just over $29,000.

The solution is to correct the imbalance and to force those at the top of the transport supply chain to pay their way. Major retailers and manufacturers continually drive down transport costs — the impact can be seen at the bottom in the devastation of truck crashes. This month alone 25 people have been killed in truck crashes. Technology can detect driver behaviour alerting them to fatigue while driving. But what difference will that technology make if the owner driver still has to take on so many jobs just to pay his bills, maintain his truck and support his family?

Technology can detect symptoms of a problem but cannot tackle the root causes. Which is where the Road Safety Remuneration Tribunal comes in. It has the power to hold these major companies at the top to account for what happens in their supply chain. Last December after two years of consultation and hearings it made its first Order setting safe minimum rates for owner

drivers in retail and long-distance.

The real catastrophe is how owner drivers and transport operators have been left in limbo by the peak body which is supposed to represent them: the National Road Transport Association. During two years of hearings and consultation it refused to engage in finding a solution to the crisis in trucking, as outlined above. It failed to inform its members of the impending changes or seek their input. Even when the Tribunal handed down a draft Order last August there was no response from NatRoad. When the final Order was delivered in December it mounted a campaign to oppose it instead of rowing in behind the ruling and pressing major clients at the top to deliver fair transport contracts to operators. But this is not NatRoad’s only failing to its members. It is opposing our move for transparency in client contracts so a full cost breakdown can be seen. It is also refusing to support our application to force clients to pay transport operators within 30 days ¬- currently operators wait up to four months or more for payment. This issue is related directly to the high number of bankruptcies and it also contributes to the high death toll in truck crashes because of the implications for maintenance of fleets.

The Order on safe rates is needed. There is no conspiracy theory, no stitch-up about it. It is about fairness and safety in transport. Let those opposing it stand up and admit they believe major clients at the top should be allowed to hand out low cost contracts which mean owner drivers and transport operators must subsist on tiny margins. Let them state profits trump people’s lives. But let’s not pretend there is no crisis already happening in the transport industry. Because there most certainly is.

Tony Sheldon is the National Secretary of the TWU

Gottliebsen’s comment on the TWU letter

In my view it should not be the job of any government body to set the prices in the private sector. But if the community really believes that this is necessary then it must be the same price for all. If you require one group in an industry (in this case owner-drivers) to charge a price that is two or three times what they currently charge then the same price rules must apply to their rivals. Instead, in this case, there are no restrictions on what companies who employ TWU members can charge. The big operators are clearly going to under cut the owner-drivers and take the business.

The TWU points out that there are already suicides and bankruptcies in the industry and I will not argue that point. But the solution is not to make bankruptcy and suicide problem dramatically worse. Instead, we need work on how to improve the position. The unfair contracts legislation that the crossbenchers drove home is a good starting point.

NatRoad response to TWU

‘Safe rates’ is an emotive phrase that has been used by the TWU to cynically expand its footprint in the transport industry and to callously force owner drivers and other smaller transport operators out of the industry. NatRoad, like all those in the road transport industry, wants transport operators to have sound, sustainable and safe businesses. This is a major objective of NatRoad. Imposing mandatory rates only on contractor drivers, often referred to as owner-drivers, as supported by the TWU, and now AiGroup, Toll and Linfox, does nothing to achieve this.

The TWU states that NatRoad has failed its members by not engaging in the consultative process that led to the making of the Order. This is incorrect. NatRoad, then an affiliate member of AiGroup, was involved in all tribunal hearings and put in various joint submissions to the Tribunal.

The tribunal is currently considering a draft variation to the 2016 Order and it would be inappropriate for NatRoad to comment on a matter before the Tribunal. The TWU too should respect our legal system and do likewise. If the TWU cared about owner-drivers it would sit down and read the almost 800 submissions received by the tribunal in the past fortnight. The TWU does not do this. Rather it throws mud at NatRoad without any consideration of the facts.

Finally, NatRoad does support a requirement that clients pay all transport operators within 30 days but it will not sell out its members, as the TWU proposes, for this small gain.

— Warren Clark, CEO, National Road Transport Association Limited (NatRoad)

Extracted in full from the Business Spectator.