Victorian Owner Drivers and Forestry Contractors Act passes Parliament

22 October 2019

Amendments to the Owner Drivers and Forestry Contractors Act 2005 (ODFC Act) passed the Victorian Parliament on 12 September 2019, granting greater rights to contractors who own and drive their own vehicles.

Reasons behind the amendments

The amendments to the ODCF Act were proposed in May 2019 after a recent Victorian Government review found companies higher in the supply chain were breaching the ODFC Act. For example, many were not providing information about rates and costs to owner drivers.

Further, the Victorian Government said in a statement that ‘Contractual arrangements were also not being properly recorded, with owner operators left with little recourse to pursue legal action if they wanted to contest issues’.

Key changes

The key changes are summarised as follows:

  • A requirement to provide owner drivers who are engaged under more than one contract in a 12 month period with the applicable schedule of rates and costs.
  • The definition of ‘freight broker’ has been changed to capture online platforms which facilitate the engagement of contractors by hirers, such as Uber Freight.
  • The ability for owner drivers to negotiate collectively, and once an agreement is reached, lodge the proposed agreements with the Victorian Small Business Commissioner (VSBC).
  • The dispute resolution procedure allows the VSBC to arrange arbitration if disagreements arise.
  • All invoices issued by owner drivers must be paid within 30 days of receipt (unless the amount is in dispute or a different period has been agreed which is not unfair to one party).
  • The option for owner drivers to be covered by the same terms and conditions as an existing, regulated contract which was jointly negotiated on the same site.
  • A requirement to provide tip truck drivers working in connection with excavation work in the building and construction industry with an Information Booklet and applicable rates and costs schedule at least three business days before the engagement begins.
  • Introduction of penalties for failure to provide an owner driver with the Victorian Owner Drivers’ Information Booklet, the applicable rates and cost schedule, a written contract and either the minimum period of notice of termination or payment in lieu of notice.
  • Authorised investigations officers have the power to enter premises with consent and require hirers to produce documents relevant to an investigation.
  • Company officers can be held liable for certain criminal offences committed by the Company.

Penalties for non-compliance

Wage Inspectorate Victoria will be responsible for monitoring compliance with the ODFC Act.

Hirers and brokers face significant penalties if they breach their obligations to provide safe and fair conditions for individuals classified as contractors.

Non-compliance by a body corporate will attract a penalty of more than $16,500, while non-compliant individuals will face a penalty of nearly $10,000.

Take-Home Message

The amendments to the ODFC Act will commence operation when they receive Royal Assent or 1 May 2020 (whichever is earlier).

In the meantime, hirers and brokers should review all existing contracts with owner drivers and processes for engaging and paying owner drivers as these may need to be updated in readiness for when the amendments come into force.

If you would like further advice on these changes or assistance with getting ready please contact a member of the Rigby Cooke Transport & Logistics team.

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