SPEAKING ON A BILL | OWNER DRIVERS AND FORESTRY CONTRACTORS AMENDMENT BILL 2019

Ms VAGHELA (Western Metropolitan) (15:05:38): I rise to speak on the Owner Drivers and Forestry Contractors Amendment Bill 2019. In 2016 the Department of Economic Development, Jobs, Transport and Resources undertook the owner-drivers and forestry contractors review. The objective of the review was to identify whether any changes were needed to the act and regulations to improve the position of owner-drivers and forestry contractors while ensuring a competitive and fair operating environment for small businesses in Victoria. The amendments address changes that have occurred in the industry since 2005 and seek to further improve the position of owner-drivers and forestry contractors by removing barriers that restrain these small businesses from achieving a fair and reasonable return for their labour and business investment. Submissions were sought from the public, with 25 received. Consultations were held with employers, industry associations, unions, owner-drivers and members of the transport and forestry industry councils. The result of the review is the bill before the house today. The suite of proposals is based on the discussions and the submissions received during the interviews. The bill amends the Owner Drivers and Forestry Contractors Act 2005, which was introduced to improve the position of owner-drivers and forestry contractors by providing them with information to improve their business skills and better understand their cost structures and contracts. Having this information before entering into a contract assists contractors to assess whether they should accept rates being offered by hirers and allows better informed negotiations. The act does not apply to drivers who are legally employees. The bill provides basic protections. Two of the key information requirements are for hirers to provide owner-drivers and forestry contractors with a copy of the applicable rates and costs schedule for their vehicle class and an information booklet three days before entering into a contract. It also sets out a framework for effective dispute resolution to address the information imbalance and unequal bargaining power of owner-drivers and forestry contractors with hirers. The current act places obligations on hirers of owner-drivers and forestry contractors but does not include any specific mechanisms to enforce these obligations or penalties for non-compliance. Therefore the main benefit that will result from these changes is increased compliance with the mandatory obligations of the act, which include a requirement for hirers to provide a copy of the applicable rates and costs schedule and an information booklet three days before a contractor is engaged. Having access to these information tools will enable owner-drivers and forestry contractors to accurately assess the overhead costs of operating their businesses, and in turn determine whether an offer will fully cover their operating costs, provide a return for their own labour and provide a return on their business investment. Ensuring that contractors can cover their business costs and maintain their vehicles will result in greater safety for all road users, as drivers will not need to work additional hours, potentially breaching fatigue laws or road rules to cover the cost of running their businesses. In summary the bill amends the act to establish a compliance and enforcement framework, including the introduction of penalties for non-compliance with the mandatory requirements of the act, which include the provision of a written contract and an information booklet. It amends the purpose of the act to include promoting industry best practice, education and training. An associated amendment is proposed to the functions of the Transport Industry Council and the Forestry Industry Council to specify that they can provide advice and make recommendations to the minister on promoting industry best practice, education and training. The bill clarifies the definition of ‘freight broker’ to ensure contractors employed through third-party contracting platforms like Uber Freight are covered. It amends the act to require a hirer or freight broker to provide the rates and costs schedule annually, rather than each time the contractor is engaged. It amends the contracting requirements of the act to require the payment of invoices within 30 days, unless there is a dispute over the amount payable. The hirer and contractor can also agree to a different payment period that is not unfair to one of the parties. The bill amends the disputes resolution procedure to specify that the Victorian Small Business Commission can arrange arbitration where the parties to the dispute agree. This amendment will introduce a fast, low-cost and confidential binding dispute resolution process for parties in dispute. Funding of up to $5.5 million was allocated through the 2018–19 budget process to establish a dedicated mechanism by which investigation and enforcement activity can be undertaken through the Victorian wage inspectorate. One of the key market failures the bill seeks to address is the lack of information for small business owner-drivers and forestry contractors to understand their operating costs and the commercial relationship they are entering. Contractors entering the transport and forestry industries have large overhead costs and liabilities and often a limited understanding of their potential income as well as their legal rights and obligations. The bill seeks to improve the financial position of owner-drivers and forestry contractors to reduce the risk of business failure, financial hardship and insolvency. It does this by removing the market conditions and barriers that restrain small businesses from achieving a fair and reasonable return on their labour and business investment. The rates and costs schedules do not set minimum rates of pay that must be paid. In this respect the status quo has been maintained. The rates and costs schedules provide owner-drivers, forestry contractors and hirers with information about typical operating costs applying to the kind of vehicle or equipment provided under the contract. The rates and costs schedules also provide a base hourly rate that would apply for the driver’s own labour if they worked as an employee. The information booklet provides a comprehensive and convenient source of information to assist contractors to understand how to operate a small business and sets out their rights and obligations to ensure they can operate their business safely and commercially. The bill requires that ongoing engagements must be in writing, and the contract must specify the minimum level of income or number of hours of work the rates are to be paid. Requirements for contracts and the provision of the information booklet and the rates and costs schedule do not apply to one-off or short-term engagements. I agree with the previous speaker from my side of the house and the benefits they highlighted. I commend the bill to the house.