In December 2015 the Road Safety Remuneration Tribunal made an order setting safe payment rates for contract drivers, which has just come into force. It was a significant decision and has created some alarm in sections of the transport industry, especially some owner-drivers.
However, the decision should not have come as shock. The Tribunal was established for precisely this purpose in 2012 following more than a decade of public and policy debate, which included two federal and one state (New South Wales) report that dealt with trucking safety, and which examined evidence of how commercial pressures in the industry, including payments to drivers, affected safety.
I undertook an inquiry into trucking safety for the NSW government in 2001, which, after considering substantial evidence and submissions, recommended a safe payments regime to protect the safety of drivers and others using the roads. In 2008, together with the Honourable Lance Wright QC, I prepared a report reviewing the evidence on link between pay and safety for the National Transport Commission (NTC), whose own report justified the establishment of the Road Safety Remuneration Tribunal.
These reviews considered substantial evidence pointing to a direct and significant link between driver remuneration, including that paid to owner-drivers, and safety — not simply in terms of road fatalities but also injuries and unsafe work practices including excessive hours/fatigue, speeding, inadequate maintenance of trucks, use of stimulant drugs, and poor mental health among drivers.
To cite just one example, two large surveys of drivers undertaken by Professor Ann Williamson for the National Road Transport Commission (now the NTC) found that being paid under a piecework system (i.e. trip-based payment system) — and this system applies to almost all owner-drivers as well as many employee-drivers — was the strongest predictor of drug use among drivers.
Drivers use stimulant drugs to combat fatigue — fatigue related to the long hours they work under such payment regimes in order to make a living. Fatigue is a serious issue in the road transport industry, but in order to address this it is important to get to the root causes of fatigue, not just treat the symptoms. Without addressing the economic underlying pressure on drivers, especially owner-drivers and small operators, such practices will not change.
The link between pay and safety is not unique to the trucking industry; it has been extensively researched in the field of workplace safety. Nor is the safety/pay issue in trucking confined to Australia. In the United States Professor Michael Belzer (Wayne State University) has undertaken extensive research showing a direct and significant relationship between pay and safety. This includes research demonstrating that increases to driver pay led to a significant reduction in crashes.
This is precisely the effect that the Road Safety Remuneration Tribunal is pursuing in Australia by setting a minimum rate for contract/owner-drivers, who are typically at the bottom of the logistics supply chain and often heavily exploited by those at the top of the chain, earning returns so low that they place strong pressure on safety.
What will be the effects of this determination? If enforced, this order will ensure drivers — whether they be contractor or employee — will not be subject to pressures that endanger their own safety or that of other road users. Will it lead to the demise of owner-drivers? The short answer to this is no, I think. They have been and always will be part of the industry. In NSW, contract determinations for owner-drivers have operated for many years without causing employers to dispense with them in favour of employee-drivers.
Will the industry change as a result of this order? Almost certainly, although this won’t happen overnight, and the changes will be complex. For example, increases in labour costs to some areas will encourage more efficient use of road transport resources. Some drivers may convert from owner-drivers to employees, but the extent of this is unclear, unlike some of the alarmist claims being made.
*Professor Michael Quinlan has been involved in research and policy advice on workplace safety for over 30 years, undertaking government reports/investigations in mining and other areas as well as trucking in Australia. He has also prepared OHS reports in the European Union and for the World Health Organisation and International Labour Organisation.