TWU

RSRT Inquiry Faces Gap To Bridge

Release date: 6/08/2015

Australasian Transport News, 6 August 2015

Model for minimum payments faces stiff opposition, but RSRT has time on its side. The Road Safety Remuneration Tribunal (RSRT) is continuing its inquiry into contract transport drivers, with the next formal hearing scheduled for tomorrow.

With video links connecting participants around the country, the inquiry is expected to further develop its timetable and receive advice from industry on the payment model it has developed with economic consultancy KPMG.

The RSRT has seen road transport contract payments as a central issue throughout its three-year existence.

The inquiry has featured in each of its annual work programs, and is likely to be an ongoing part of the fourth when it is revealed at the end of this year.

There is no set end date for the inquiry. If and when the tribunal becomes satisfied it has covered all angles, it is able to issue a draft order – which will then be open to further scrutiny and feedback from affected organisations.

If made, an official order will be enforceable across the economy through the Fair Work Ombudsman.

The inquiry’s work this year has been based around a complex model for interpreting the hourly and per-kilometre revenues that contract drivers need to maintain a safe and sustainable business.

Created by KPMG and first shared in April, the model considers a range of inputs and assumptions, including typical vehicle types and other capital expenses faced by owner drivers, the grading of individual drivers, and the types of services being undertaken.

It has generated a vast amount of feedback from across the industry, with Australia’s supermarket chains in particular questioning the assumptions behind the KPMG model.

Of the 184 questions posed to KPMG by eight different stakeholders, 76 – or close to 42 per cent – came from the Australian National Retail Association (ANRA), which counts only the largest Australian retailers among its membership.

A further 22 questions were put to KPMG by Coles Supermarkets itself, despite its membership of ANRA.

The umbrella organisation did not appear satisfied by KPMG’s responses, published on June 25.

A supplementary submission from the ANRA notes that it remains "very concerned" that the draft cost model does not accurately reflect actual work practices in the supermarket distribution sector. It says the model uses flawed assumptions on capital outlay and the value of the trucks that are undertaking supermarket work, bases fuel costs on outdated pricing sources, and has wrongly assumed the fuel burn rates it uses.

"These errors are significant," the submission warns. "The result is that the KPMG Draft Cost Model produces excessively high indicative rate outputs which are well above the ‘true cost recovery’ for contractor drivers operating in the supermarket distribution sector."

Perhaps not surprisingly, driver representatives are keen for the minimum rates that the model would require. The Transport Workers Union (TWU) says the input parameters could be dealt with through formal arbitration but has called on the RSRT to use the KPMG model as the basis for rates in the retail and long distance sectors.

"The TWU submits that the time has come for the tribunal to issue a draft Road Safety Remuneration order," its latest submission concludes.

A spokesperson for the ANRA has not responded to ATN’s enquiries over the past month.

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