By Julian  Arndt, Director at Australian Business Lawyers & Advisors

The Fair Work Commission (FWC) is reviewing significant changes impacting the transport sector, following the enactment of the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024.

These legislative amendments enable the FWC to create minimum standards for contractors and employee-like workers in the road transport industry. As these standards develop, Australian Business Industrial (ABI) is actively representing employer interests, ensuring that the unique needs of principal contractors are considered. 

Understanding the FWC’s minimum standards orders

  The amendments empower the FWC to make two types of minimum standards orders within the transport sector:

1. For regulated road transport contractors – standards governing independent contractors performing road transport work.
2. For employee-like workers – standards for workers who have certain ‘employee-like’ characteristics eg. ‘gig workers’ receiving work through an App.

Utilising the new laws for the first time, the Transport Workers' Union of Australia (TWU) has submitted four applications to the Fair Work Commission (FWC) seeking the establishment of minimum standards orders and a contractual chain order within the road transport industry.

These applications are:

1. MS2024/1: This application requests an employee-like worker minimum standards order for individuals performing road transport work involving goods, wares, or other items (excluding food and beverages). The aim is to set minimum standards for these workers, who operate under conditions similar to employees but are classified differently. These applications seek minimum payrates which do not currently apply to such workers.
2. MS2024/2: This application seeks a road transport minimum standards order for regulated road transport contractors engaged in transporting goods, wares, or other items (excluding food and beverages). The goal is to establish baseline standards for independent contractors in the road transport sector. 
3. MS2024/3: This application proposes an employee-like worker minimum standards order for individuals involved in the delivery of food, beverages, and similar items via road transport. It aims to set minimum standards for workers in the food and beverage delivery sector. These new standards seek minimum payrates which do not currently apply to such workers.
4. MS2024/4: This application requests a road transport contractual chain order, focusing on the contractual relationships within the road transport industry. This application relates to contractual conditions like minimum payment periods.

In summary, the TWU’s 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 10 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, and
• 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.

These applications will be reviewed by a newly constituted expert panel for the road transport industry, tasked with conducting consultations, gathering feedback, and understanding the sector's varied needs and challenges. 

Implications of the proposed standards for transport industry

The TWU’s proposed standards have broad implications, covering pay rates, safety requirements, and contractual terms that could impact compliance processes and operational frameworks. 

For principal contractors, these minimum standards could lead to changes in engagement practices, cost structures, and compliance requirements, influencing the economics of the transport sector, from individual businesses to the broader supply chain. 

ABI’s next steps in the consultation process

As a leading advocate for principal contractors in the transport sector (and business generally), ABI will take a prominent role in the consultations. The next step is an appearance before the Commission on 29 November 2024 to discuss the consultation process.

ABI, through Australian Business Lawyers & Advisors, will continue to actively participate in the FWC’s review process and work to protect principal contractor interests. The applications are likely to be determined in 2025 and any minimum standards arising from the proceedings will likely have a significant transition period before implementation.

ABI encourages its members to stay informed on these developments. Future updates will provide insights into the status of consultations, timelines, and any emerging obligations for transport employers and principal contractors. Members’ input and feedback will remain critical, as ABI seeks to provide a strong, unified voice on behalf of principal contractors and broader business.