New protections for road transport contractors from unfair termination

New protections for regulated road transport contractors from unfair termination from a road transport business come into play from August 26.

The provisions give the Fair Work Commission (FWC) new powers under the second tranche of changes to the Closing Loopholes Bill.

Eligible regulated road transport contractors will have been unfairly terminated if the FWC is satisfied that:

  • The person’s services contract was terminated by, or as a result of the conduct of, a road transport business.
  • The termination was unfair (for example, if it was not for a valid reason), and
  • The termination was not consistent with the Road Transport Industry Termination Code (the Termination Code).

The yet-to-be-finalised Termination Code will detail a range of matters, including the processes road transport businesses must follow when terminating a regulated road transport contractor.

The code will be a legislative instrument made by the Minister for Employment and Workplace Relations, Tony Burke.

There will also be a separate Digital Labour Platform Deactivation Code for ‘employee-like workers’.

In its response to a call from the Department of Employment and Workplace Relations for industry views on the final code content, the National Road Transport Association (NatRoad) said it wants to see protection of trucking businesses and employees.

“We are calling for assurance that the Termination Code will protect truck operators through fair practices, providing them with the security necessary to allow them to confidently invest and grow their businesses,” NatRoad CEO Warren Clark said.

“Truck operators are highly skilled professionals who form an essential part of the nation’s supply chain. The proposed Termination Code must reflect the operational realities of the road transport industry, ensuring flexibility and fairness while protecting drivers.”

Key points of NatRoad’s submission

Protection against unfair termination:

  • Establishing clear criteria to differentiate between regular, systematic engagements and irregular or sporadic engagements.
  • Ensuring that terminations are based on valid reasons such as conduct-related breaches, capacity-related issues, or genuine commercial reasons.

Secure investments:

  • Recognising the significant investments made by truck operators in their vehicles and equipment.
  • Providing appropriate notice periods and flexibility in termination processes to reflect the nature of the industry and protect operators from abrupt contract terminations, therefore keeping them on the road where they are needed.

Fair commercial practices:

  • Developing a termination code that supports the unique structure and operational dynamics of the road transport industry.
  • Ensuring that contracts are reliable and that operators can confidently invest in their businesses.

“We are already dealing with a truck driver shortage, and so if our operators are not able to be confident regarding the future of their contracts, this issue will only get worse,” Clark said.

“That’s why we want to emphasise the importance of a practical and effective Termination Code that balances the rights and obligations of road transport businesses and their contractors and sub-contractors.”

NatRoad said its response underscores the need for a code that not only protects the interests of truck operators but also supports the broader community.

“Truck operators are integral to the supply chain, and their stability ensures the continued support of downstream industries such as fuel stations, mechanics, and local businesses.”

The department will accept confidential online submissions on the code discussion paper via its website until 11pm, July 1.

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