The Owner Drivers and Forestry Contractors Act 2005 David Hildebrand Victorian Small Business Commission Wednesday, 30 August 2017
ODFC Act 2005 Legislation commenced on 1 December 2006 Based on Retail Leases Act 2003 Purpose of Act: “ to provide some basic protections and a framework for effective resolution of disputes to improve the position of vulnerable small businesses .. ” (2 nd Reading Speech) Namely, owner drivers in transport industry (and forestry contractors) That is, independent contractors, not employees
Owner drivers & hirers Definition of owner driver : A natural person (or corporation or partnership) who carries on a business of transporting goods in 1 or more vehicles supplied by him and operated by him (s 4) Must have 3 or less vehicles (Regulation 4) Definition of hirer : A person who engages a contractor i.e. owner driver (s 3) Definition of freight broker : A broker or agent in the business of procuring or arranging the engagement of contractors by hirers (s 3)
Code of Practice Owner Drivers and Forestry Contractors Regulations 2006 Owner Drivers and Forestry Contractors Code of Practice Mandatory requirements concerning the engagement of owner drivers Describes industry best practice Guidance about: Unconscionable conduct Unjust terms
Information Booklet A practical resource to assist owner drivers to successfully operate a business. It covers rights and obligations under the Act and Code Mandatory for hirer to give Information Booklet to owner driver at least 3 days before engagement (s 10)
Rates & costs schedules Different Schedules for different vehicles Schedules give owner drivers information about the typical running costs of a business and rates typically paid to employee drivers for similar work They do not set minimum rates of pay – advisory only Mandatory for hirer to give most applicable Schedule to owner driver at least 3 days before engagement (s 16)
Who does what? Legislation administered by Minister for Industrial Relations Secretariat support provided by Industrial Relations Victoria in DEDJTR Transport Industry Council Forestry Industry Council VSBC – Alternative dispute resolution, including mediation of disputes VCAT – Determination of disputes
Contracts – minimum requirements 4 Requirements Contracts MUST: Be in writing (TIC has developed a Model Contract – but not mandatory) State guaranteed minimum number of hours of work or income level the owner driver will receive Set out rates to be paid to the owner driver Set out minimum period of notice of termination of engagement (1 or 3 months, if heavy vehicle)
VSBC ADR role Preliminary Assistance No cost Information and assistance Preliminary assistance Mediation Low cost - $95 per party Commercial outcomes
Types of disputes Contractual disputes Written or oral contracts, over terms of contract or engagement T ermination disputes Hirers providing no or insufficient notice of termination “ serious and wilful misconduct ” Not defined VCAT Case – ADA Cartage and Holcim Australia [2010] VCAT 1771 Whether a false claim in a delivery docket was “ serious and wilful misconduct ” VCAT held the false claim was wilful and amounted to misconduct, but not “ serious ” misconduct. Serious misconduct “ is conduct so seriously in breach of the contract that by standards of fairness and justice the hirer should not be bound to continue the engagement of the owner driver .” VCAT awarded the owner driver damages of 3 months payment in lieu of notice of termination
Case study An owner driver was terminated by its hirer on grounds of “ serious and wilful misconduct ” for breach of the hirer’s OH&S policies. The driver lodged a dispute with the VSBC under the ODFC Act . At mediation, the owner driver was represented by his union. The mediation was successful. Under Terms agreed between the parties, the hirer re-engaged the driver on certain conditions, including that a satisfactory driver safety assessment was completed and strict adherence with the hirer’s OH&S policies. The hirer confirmed its intent to give notice to all drivers of the importance of its OH&S policy as an essential element of all contracts. Importantly , the parties agreed to disclose the above terms for educational and training purposes .
VSBC statistics Since 2006, the VSBC has received 400 owner driver disputes In 2016-17, owner driver disputes increased by almost 16% to 44 disputes (38 disputes in 2015-16) In 2016-17, 24 mediations were held Mediation success rate = over 86%
Review of ODFC Act In November 2016, the Minister for Industrial Relations announced a review of the ODFC Act 2005 and Regulations. Purpose of Review: Consider changes that have occurred within the Victorian transport and forestry industries and at the national level. Explore whether any changes could be made to improve the position of owner drivers and forestry contractors while ensuring a competitive and fair operating environment for small businesses in Victoria. T erms of Reference: Objectives of Act and Regulations Coverage of Act Contracting requirements Disputes resolution mechanism Governance, membership and functions of TIC and FIC Mandatory requirements, guidance material and best practice information in the Code Systematic avoidance of responsibilities and rights and ways to address these matters Compliance and enforcement arrangements Regulatory burden of Act and Regulations National legislative and regulatory developments Changes within industries Consider recommendations of the Victorian Inquiry into the Labour Hire Industry and Insecure Work
Contact VSBC Contact the VSBC for: • Information • Assistance • Guidance • Dispute resolution • Sign up to our e-newsletter www.vsbc.vic.gov.au 13 VSBC (13 8722) enquiries@vsbc.vic.gov.au
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