House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Employment, Senator the Hon. Michaelia Cash)

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Road Safety Remuneration Repeal Bill 2016

The Road Safety Remuneration Repeal Bill 2016 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

The Bill will repeal the Road Safety Remuneration Act 2012 (the main Act), thereby abolishing the Road Safety Remuneration Tribunal (the Tribunal), and allow the Minister to make, by legislative instrument, rules dealing with transitional matters.

Human rights implications

The Bill engages the right to just and favourable conditions of work under Article 7 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Article 7 of the ICESCR requires that State Parties recognise the right of everyone to the enjoyment of just and favourable conditions of work which ensure, in particular, remuneration that provides all workers with fair wages, a decent living, safe and healthy working conditions and rest, leisure and reasonable limitation of working hours.

The main Act establishes the Tribunal to perform functions including making road safety remuneration orders.

To date, the Tribunal has issued two enforceable orders.

The Road Transport and Distribution and Long Distance Operations Road Safety Remuneration Order 2014 (the 2014 order) sets arrangements for payment and deduction conditions for owner drivers, provides health and safety and contract obligations and has protections from adverse conduct.

The Contractor Drivers Minimum Payments Road Safety Remuneration Order 2016 (the 2016 order) was issued by the Tribunal on 18 December 2015 and was due to commence on 4 April 2016. The 2016 order sets mandatory minimum pay rates for owner drivers (i.e. contractor drivers) working either in supermarket distribution or long distance operations. The 2016 order effectively intervenes in contractual arrangements. While the 2016 order was intended to benefit owner drivers, overwhelmingly the industry including owner drivers and small road transport businesses oppose it. This is evidenced by proceedings before the Tribunal and the Federal Court.

In March 2016, over 30 parties applied to change the commencement date of the 2016 order on the ground that the industry had not had sufficient time to prepare for the order. Around 800 submissions from across the industry were presented to the Tribunal highlighting significant concern and confusion about the impacts of the order, particularly on the viability and livelihoods of owner-drivers and small road transport businesses.

On 1 April 2016, the Tribunal decided not to delay the commencement of the 2016 order. Subsequently, the Federal Court granted an urgent stay of the 2016 order. However, on 7 April 2016, the Full Federal Court refused to extend the stay.

The Bill will end the uncertainty for the industry and negative impacts of the Road Safety Remuneration System on owner drivers and family businesses.

The Bill will not extinguish rights and obligations that have accrued during the operation of the main Act and before the commencement of the Bill. The Bill will restore freedom for parties to negotiate the most appropriate contractual arrangements, and will include the ability for the Minister to make rules to ensure a smooth transition from the current system.

Australia's principal means of ensuring safe and healthy workplaces is through a system of state and Commonwealth work health and safety laws, which have been harmonised across the majority of jurisdictions through the adoption of model laws.

Two independent reviews, one by Jaguar Consulting of April 2014 and one by PricewaterhouseCoopers of January 2016, concluded that there is limited evidence of a link between safety and remuneration and that the main Act has not delivered any tangible safety benefits. Both reviews found there is substantial regulatory overlap with work health and safety laws and other road safety regulation, and that the level of regulation is not justified based on the limited evidence.

To the extent that the Bill may limit enjoyment of the right to just and favourable conditions of work, it pursues the reasonable objective of repealing the main Act to prevent any unnecessary and irreversible negative impacts on the road transport industry, particularly on the viability of owner drivers and small transport operators. The repeal of the main Act is a necessary and proportionate response to these concerns.

Conclusion

The Bill is compatible with human rights because, to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.