1.1. What is the Owner Drivers Scheme?
The Owner Drivers Scheme establishes a framework for the regulation of contractual dealings between Owner Drivers, Hirers and Freight Brokers which consists of:
The Owner Drivers Scheme is supported by this Information Booklet, the Rates and Costs Schedules, the Model Contracts and the Model Forms to appoint negotiating agents.
The Act
The Act aims to provide some basic protections and a framework for the effective resolution of disputes to improve the position of Owner Drivers in the road transport industry, while maintaining a healthy and competitive industry. It also applies to forestry contractors.
The Act establishes the TIC which is comprised of representatives from industry and employee associations and government. The TIC has specified functions which include advising and making recommendations to the Minister on the content of Codes of Practice, the Information Booklet, and Rates and Costs Schedules. The TIC also advises on matters relevant to Owner Driver Contracts, and the commercial practices of Owner Drivers generally.
The Act was amended effective 1 May 2020, including to provide for penalties for non-compliance with the Act.
The Code
The Code, which is included in the Regulations:
- sets out mandatory requirements that must be complied with
- provides guidance on conduct that may be unconscionable and contract terms that may be unjust (including examples to assist Owner Drivers and Hirers to avoid such conduct)
- describes industry best practice.
Rates and Costs Schedules
TIC has developed Rates and Costs Schedules for a number of vehicle types to provide Owner Drivers with information about the typical operating costs applying to their business depending on the type of vehicle being operated.
Note the Rates and Costs Schedules do not set minimum rates that must be paid to Owner Drivers.
The Rates and Costs Schedules set out both variable operating costs and fixed operating costs.
- Variable costs are incurred when your vehicle is running, and include fuel, oil, tyres, road tolls, repairs and maintenance. Generally, the further your vehicle travels, the more you will pay.
- Fixed costs are expenses that stay the same whether your vehicle stays in your driveway or travels 100 or 100,000 kilometres. Fixed costs include loan repayments, insurance, administration costs and registration.
The Rates and Costs Schedules also provide information on rates that would typically apply for an Owner Driver’s own labour if he or she did the work as an employee.
Having this information before entering into a contract assists Owner Drivers to assess whether they should accept an offer and facilitates better-informed contract negotiations.
Every vehicle is different, and every business depends upon many factors so your own costs may be different from the Rates and Costs Schedule. If you have a different vehicle type or additional features, you can use the Rates and Costs Schedule for the vehicle that is most similar to your own vehicle as a guide and add in any additional costs accordingly.
More information
A copy of the Act and the Regulations can be downloaded from www.legislation.vic.gov.au.
The current Rates and Costs Schedules and the Code can be obtained from wageinspectorate.vic.gov.au/odfc.
1.2. Who is covered by the Owner Drivers Scheme?
The Act applies to Owner Drivers who are engaged:
- under a contract made in Victoria or subject to the law of Victoria
- to transport goods wholly within Victoria or
- to transport goods if a substantial part of the services under the contract are performed in Victoria.
This includes Owner Drivers working for online platform businesses.
The Act also applies to haulage and harvesting contractors in the forestry industry. The Act does not apply to employee drivers.
An Owner Driver is any sole trader, non-public company or partnership that:
- carries on a business of transporting goods in a maximum of three vehicles and
- those vehicles are supplied and operated by the owner of the business (whether solely or with the use of additional or relief drivers).
Owner Drivers and forestry contractors are sometimes referred to as ‘contractors’ in the Owner Drivers Scheme.
More information
See sections 4 and 8 of the Act and clause 6 of the Regulations.
1.3. What is required under the Owner Drivers scheme?
The Act and the Code contain rules (set out in more detail below) in relation to:
- Hiring Owner Drivers (see 1.4 of this Information Booklet)
- Contract requirements (see 1.5 of this Information Booklet)
- Paying Owner Drivers and requiring Owner Drivers to make payments (see 1.6 of this Information Booklet)
- Terminating engagements (see 1.7 of this Information Booklet)
- Protections for exercising rights (see 1.8 of this Information Booklet).
Disputes between Owner Drivers and Hirers (including claims of non-compliance with these requirements) may be dealt with by the dispute resolution process set out in the Act (see 1.9 of this Information Booklet).
Breach of some of these requirements may be an offence and Wage Inspectorate Victoria has powers to investigate and may take enforcement action (see 1.12 of this Information Booklet).
1.4. Hiring Owner Drivers
1.4.1. Giving information to Owner Drivers
The Act contains requirements to ensure that Owner Drivers have a copy of this Information Booklet and a copy of the relevant Rates and Costs Schedule.
When must the Hirer provide the information?
Hirers must provide Owner Drivers with a copy of this Information Booklet and a copy of the relevant Rates and Costs Schedules:
- at least three business days before the Owner Driver is engaged, if the Owner Driver will be engaged for a period of at least 30 days; or
- on the 30th day, if the Owner Driver is engaged for a total period of at least 30 days in any three-month period.
Hirers must give Tip Truck Drivers (irrespective of the how long they will be engaged for):
- A copy of this Information Booklet at least three business days before the Tip Truck Driver is first engaged. Unless it is revised it does not need to be provided for subsequent engagements with the same Hirer.
- A copy of the relevant Rates and Costs Schedule at least three business days before the Tip Truck driver is first engaged. Unless it is revised it does not need to be provided for subsequent Victorian Owner Driver Information Booklet (October 2020) 12 engagements with the same Hirer if the interval between engagements does not exceed 12 months.
These requirements also apply to tender situations.
Under the Act, “business day” is a day other than a Saturday, Sunday or public holiday.
A Hirer must also provide any revised relevant Rates and Costs Schedule to current Owner Drivers and Tip Truck Drivers as soon as practicable after publication.
If the Owner Driver or Tip Truck Driver is engaged through a Freight Broker, then the Freight Broker must provide this information instead.
Failure by the Hirer or Freight Broker to comply with these provisions may be an offence under the Act.
How can the Hirer provide this information?
A Hirer or Freight Broker, who is required under the Act to provide the applicable Rates and Costs Schedule and Information Booklet to an Owner Driver, may do so in hard copy or electronic form. Examples of ways of providing copies of the Information Booklet and the Rates and Costs Schedule are via a link to an Internet site on which this information is available or in hard copy by mail or in person.
In order to demonstrate compliance with the requirements of the Act, it is important to keep good records.
From late 2020, Hirers and Freight Broker are required under the Code to keep certain records about the engagement of contractors. This includes the date/s that the Information Booklet and the Rates and Costs Schedule are given to an Owner Driver and any records of them being given. If this information is provided by hand, the Hirer or Freight Broker must also retain a signed acknowledgement of receipt by the Owner Driver.
More information
Divisions 1 and 2 of Part 2 of the Act and section 26A of the Act.
1.4.2. No misleading advertising
A Hirer seeking to engage an Owner Driver must not make any representations that are false, misleading or deceptive.
For example, if an Owner Driver sees an advertisement that says drivers ‘will’ earn in excess of $1500 per week, and later finds out that their average gross income is less than $900 per week and no other drivers for the business have earned more than $1200 per week, this would be considered a breach of the Code.
More information
See clause 9 of the Code.
1.4.3. No unconscionable conduct
Hirers and Owner Drivers must not engage in unconscionable conduct with respect to each other, including during negotiations.
Unconscionable conduct is not defined in the Act; however, the Act sets out factors that VCAT may examine when deciding if conduct is unconscionable. The Code also provides guidance on what may be found by VCAT to be unconscionable conduct during negotiations; however, what may amount to unconscionable conduct will depend on the whole of the parties’ circumstances.
The Code does not prevent Hirers or Owner Drivers from acting vigorously in their commercial interests. However, each party should deal with the other party, or parties, fairly and in good faith when negotiating a new contract or a variation to a contract.
The Code notes that in the absence of any special circumstances, where a Hirer or an Owner Driver engages in the type of conduct described below during negotiations, VCAT may find it is unconscionable (the Code also notes that other behaviour may also be considered by VCAT to be unconscionable conduct):
- where a party, by themselves or through an agent:
- does not provide a reasonable opportunity to discuss an offer, or makes offers on a ‘take it or leave it’ basis, suggesting a party must accept an offer and refuses to consider any alternative offers; or
- does not provide a reasonable opportunity for another party to properly examine and consider offers; or
- does not provide a reasonable opportunity for another party to obtain legal, financial or other advice, including in the party’s preferred language; or
- disguises the terms of a contract by using fine print, unnecessarily difficult language, or a deceptive layout or headings; or
- summarises the meaning of a document to another party, but omits to mention important terms in a way that is misleading; or
- fails to correct another party’s misunderstanding, where they knew, or reasonably ought to have known, that the other party was under a serious misapprehension about the terms of the agreement; or
- where a party builds up reasonable commercial expectations in another party for the renewal of an agreement, and then exploits those expectations to extract a harsh or one-sided deal from the other party; or
- where a party attempts to pressure another party into accepting an offer by acting in breach of contract, or otherwise acting unlawfully or threatening to do so.
An allegation of unconscionable conduct by a Hirer or Owner Driver can be referred to the VSBC for resolution, and if not resolved, can be referred to VCAT. See section 1.9 below.
More information
See sections 31 and 32 of the Act and clauses 4 and 5 of the Code.
The Code also provides guidance on when VCAT might decide that there has been unconscionable conduct in other circumstances including in relation to:
- parties not disclosing information (see clause 7);
- the Hirer not passing on additional rates or levies paid by the customer (see clause 12);
- the contract not providing for regular rate reviews for increases in overheads costs (see clause 12);
- the Hirer reducing remuneration for carrying smaller loads (see clause 13); – not paying invoices when due (see clause 14); and
- allocation of work (see clause 18).
1.4.4. Joint negotiations
Owner Drivers or Hirers may appoint negotiating agents to act on their behalf. The Act requires the other party to recognise and deal with that agent. The agent could be an accountant, consultant, a trade union or industry association, an Owner Driver colleague or a committee of colleagues.
An agent can enter into a binding legal contract on behalf of the Owner Driver or Hirer. A Hirer can request that you provide an instrument of appointment which authorises an agent to act on your behalf before the Hirer party will deal with your agent (and vice versa). The TIC has developed model forms to appoint negotiating agents.
Hirers and Owner Drivers must not be coerced in relation to the appointment of a negotiating agent.
The Act permits joint negotiations between Owner Drivers engaged by a single business and their common Hirer, but not industry-wide negotiations. The Act does not authorise breaches of contract, strikes or boycotts in the conduct of joint negotiations.
Owner Drivers may be offered a regulated contract on the same terms as an existing jointly negotiated contract, while at the same time retaining the opportunity to negotiate their own contractual arrangements.
More information
See sections 25, 26 and 64 of the Act.
The model forms to appoint a negotiating agent can be downloaded from wageinspectorate.vic.gov.au/using-written-contracts-transport-and-forestry.
1.4.5. Varying contracts for different vehicles or motorised equipment
If a Hirer requests or requires the Owner Driver to supply a vehicle or motorised equipment that is different to what is supplied under the contract, or if the Owner Driver identifies a legitimate need to upgrade the vehicle or motorised equipment:
- The Hirer and Owner Driver must enter into negotiations for variations to the contract for that purpose, having regard to the factors in clause 10(2)(a)-(d) of the Code;
- If, after these negotiations, the Hirer agrees that a different vehicle or motorised equipment may be supplied by the Owner Driver, the Hirer must set out in writing the terms and conditions being offered for the services using the different vehicle or motorised equipment before the Owner Driver purchases or otherwise commits to supplying the vehicle or motorised equipment; and
- If the Hirer requires particular specifications for the different vehicle or motorised equipment, the specifications must be provided in writing to the Owner Driver. The Hirer should also provide a copy of the applicable Rates and Costs Schedule.
More information
1.5. Contract requirements
1.5.1 Parties must not claim to exclude the Act or other laws or the Code
A party to an Owner Driver Contract (i.e. the Hirer or Owner Driver) cannot claim to the other party that the other party's rights or entitlements under the Act, any other law or the Code are excluded unless the Act, other law or the Code allows them to.
For example, if a contract included a clause that an Owner Driver cannot notify a dispute to the VSBC, this clause would be invalid and unenforceable as it is contrary to the Act.
More information
Section 65 of the Act and clause 6 of the Code.
1.5.2. Unjust terms
VCAT has the power under the Act to vary contracts to remedy unjust terms. Section 44(2) sets out factors that VCAT may consider when deciding whether a contract contains an unjust term.
Whilst what may amount to an unjust term will depend on all the circumstances, the Code provides guidance on when VCAT may find that there is an unjust term in the context of:
- setting and reviewing rates (clauses 11 and 12);
- payment terms (clause 14); and
- deductions for the use of the Hirer's equipment and technology (clause 16).
More information
Section 22 of the Act and clauses 11, 12, 14, and 16 of the Code.
1.5.3 Written contracts
Written contracts, even for short-term arrangements, are good business practice and help reduce disputes and uncertainty.
For ongoing engagements of no fixed duration or for a period of at least 30 days, Hirers must engage Owner Drivers using a written contract. The contract must set out:
- the minimum income or hours of work (this can be zero hours or dollars if the parties agree to this);
- the rates to be paid;
- and the minimum period of notice to end the contract or payment in lieu of notice (minimum notice periods are set out in the Act and summarised at 1.7 of this Information Booklet).
Under the Act it is an offence for Hirers to fail to do this.
It is good business practice for both Owner Drivers and Hirers to keep a copy of the written contract.
The TIC has developed a Model Contract for use by Owner Drivers and Hirers. It is not compulsory to use the Model Contract, but you may find it useful as guidance on typical contract terms. You can vary the Model Contract to suit your own circumstances.
More information
You can download the Model Contract from wageinspectorate.vic.gov.au/using-written-contracts-transport-and-forestry
1.6. Paying Owner Drivers and Requiring Owner Drivers to make payments
1.6.1. Payment of invoices within 30 days
A Hirer must pay an amount payable to an Owner Driver within 30 days after receiving an invoice, unless there is a dispute about the amount payable or a different, fair period for payment has been agreed.
More information
1.7. Terminating engagements
1.7.1. Notice of termination
Where there is an ongoing engagement of at least three months’ duration, an Owner Driver is entitled to a minimum period of notice of termination of their contract (except in the case of serious and wilful misconduct). The notice period may be worked out or paid in lieu.
The minimum period required to be given by either party to terminate the contract is:
- three months’ notice for vehicles in excess of 4.5 tonnes GVM or ATM; or
- one month’s notice for other vehicles.
This minimum period does not apply where the Owner Driver has terminated the engagement because there has been a material breach of the contract by the Hirer.
Where an Owner Driver consider that this notice period is not needed, the requirement can be waived by the Owner Driver obtaining a certificate from the VSBC and then giving the Hirer written notice. An application form for a certificate to waive the notice period is available from the VSBC website www.vsbc.vic.gov.au.
Where an Owner Driver is engaged under a fixed-term contract, the contract will come to an end automatically on the expiry date.
Under the Act it is an offence for a Hirer to end an Owner Driver’s engagement without providing the required notice of termination or payment in lieu.
More information
See sections 21, 22 and 22A of the Act.
Section 22 sets out a formula for calculating payment in lieu of notice.
1.7.2. Absences due to illness or family responsibilities
A Hirer must not terminate a contract only because the Owner Driver is absent as a result of temporary illness or incapacity, family responsibilities or similar reason, without first allowing a reasonable period of time for the Owner Driver to provide a suitable replacement driver. What is a reasonable time will depend upon the nature of the work and the contract terms.
More information
1.8. Protections for exercising rights
The Act protects people exercising their rights under the Act.
A person must not subject, or threaten to subject, another person to be a 'detriment', where that other person has:
- exercised their rights under the Act or the Code; or
- brought or proposed to bring a proceeding under the Act; or
- informed or proposed to inform someone of an alleged breach of the Act, Regulations, Code or a VCAT order; or
- participated or proposed to participate in joint negotiations.
The Act also provides that a Hirer must not subject or threaten to subject an Owner Driver to any 'detriment' because the Owner Driver has:
- raised or proposed to raise health and safety issues; or
- sought or proposed to seek to negotiate a contract.
The Act sets out different types of 'detriment', which include:
- terminating the Owner Driver's engagement;
- altering the position of an Owner Driver to their disadvantage under a contract with them;
- refusing to engage an Owner Driver; and
- discriminating against a person in the terms or conditions on which the person is to be engaged as an Owner Driver.
More information
1.9 Dispute resolution process
Under the Act, a dispute means a dispute between one or more Owner Drivers and one or more Hirers arising under or in relation to the Act, the Code or a regulated contract. This includes an allegation that a person has contravened the Act, Regulations, the Code or a regulated contract.
Where a dispute arises, the Act provides a process for the resolution of disputes between Hirers and Owner Drivers. This involves the VSBC and VCAT. However, except in urgent circumstances, parties should attempt to resolve the dispute between themselves (see clause 8 of the Code).
Where a dispute is unable to be resolved between the parties, the Act provides a two-stage process for the resolution of disputes:
- stage 1 – a referral to the VSBC; and
- stage 2 – an application to VCAT.
In general, a dispute must be referred to the VSBC (and the VSBC must first certify that ADR has failed, or is unlikely, to resolve the dispute) before it may be the subject of an application to VCAT. However, where a party seeks an injunction (which is an order to stop another party from doing something), that party may apply directly to VCAT. If a party refuses to take part in, or withdraws from, the VSBC process, VCAT may make an order for costs against that party.
1.10. Victorian Small Business Commission
The VSBC is an independent office established by the Victorian Government to assist small businecoolsses. Under the Act, the VSBC provides an independent, fast and low-cost ADR service for Owner Drivers and their Hirers. The VSBC offers preliminary assistance and advice to ensure Owner Drivers and Hirers are fully aware of their rights and obligations. The VSBC also provides a confidential mediation service and consent arbitration service.
Referring a dispute to the Victorian Small Business Commission
An Owner Driver or their Hirer may refer a dispute to the VSBC for ADR. Before lodging a dispute, you should consider discussing the matter with your solicitor or association or contacting the VSBC. If you would like to refer a dispute to the VSBC, you should complete the online application form or download a hardcopy form from www.vsbc.vic.gov.au. There is no application fee.
Preliminary assistance
Upon receiving an application, the VSBC will attempt to resolve the dispute by working through the issues with the parties by email or letter. This preliminary assistance is free of charge for the parties and is the step before mediation.
In the event that preliminary assistance does not resolve the dispute, the VSBC may invite the parties to attend mediation.
The mediation process
Mediation is a process of negotiation that assists the parties involved in a dispute to identify and explore options to resolve the dispute. It aims to resolve all the issues between the parties to keep the relationship going and allow everyone to ‘get on with business’.
The role of a mediator is to help the parties communicate openly and evaluate their options to reach their own agreement. Mediators are not judges; they do not determine binding outcomes and they do not give either party advice.
As part of the VSBC’s mediation process, you will be brought together at an agreed time and location with an experienced and independent mediator appointed by the VSBC to discuss your dispute.
In the event the dispute proceeds to mediation, there is a fee payable by each party (rates are published on the VSBC website). The VSBC pays the remainder of the mediator’s fees.
The consent arbitration process
With the consent of both parties, the VSBC can arrange for disputes to be referred to be arbitration. Parties to a dispute under the Act may agree to apply for arbitration under the Act regardless of whether mediation has occurred.
After receiving written submissions and relevant documents from the parties and possibly holding a hearing, an independent arbitrator will issue a final decision that is binding upon the parties.
In the event the dispute proceeds to arbitration, there is a fee payable by each party (rates are published on the VSBC website). The VSBC pays the remainder of the arbitrator’s fees.
More information
Divisions 1 and 2 of Part 5 of the Act and Clause 8 of the Code.
Contact the VSBC on 13 8722 or go to www.vsbc.vic.gov.au.
1.11. The Victorian Civil and Administrative Tribunal
VCAT is an independent tribunal that seeks to provide a low-cost, accessible and efficient dispute resolution service.
Where there is an allegation of unlawful termination of the engagement of an Owner Driver, the application must be made within 12 months of the date on which the termination is alleged to have occurred. In all other disputes, the time limit is six years after the date on which the dispute arose.
After hearing and deciding a dispute, VCAT may make a range of orders, including:
- an order for a party to do, or refrain from doing, something;
- an order invalidating, varying or requiring performance of a contract;
- an order for a refund, compensation or damages; and
- any other order it considers fair, including varying or voiding a contract term to avoid injustice.
If the Hirer or Freight Broker has not complied with the requirements in relation to providing this Information Booklet or the applicable Rates and Costs Schedule (see 1.4.1 of this Information Booklet), VCAT may make an order that the Owner Driver is paid a specified amount for their services under the contract.
In deciding what amount to order, VCAT must take into account the terms of the relevant contract, the amount the Owner Driver would have been entitled to if the Owner Driver had provided the services as an employee, any applicable Rates and Costs Schedules, and what is fair and reasonable in the circumstances.
More information
Division 3 of Part 5 of the Act.
Contact VCAT on 1300 01 8288 or go to www.vcat.vic.gov.au.
1.12. Wage Inspectorate Victoria
As well as Owner Drivers and Hirers being able to follow the disputes resolution process under the Act, there are now also penalties for non-compliance with certain provisions of the Act.
Wage Inspectorate Victoria, which operates within Industrial Relations Victoria in the Department of Premier and Cabinet, is tasked to provide a robust compliance and enforcement regime.
Authorised Officers are given powers under the Act that they may exercise for certain purposes. These powers include requiring information or documents. Failure without reasonable excuse to provide the documents or information is an offence. It is also an offence to provide false or misleading documents.
More information
Contact Wage Inspectorate Victoria on 1800 287 287 or by email at odfc@wageinspectorate.vic.gov.au.
Visit www.vic.gov.au/wage-inspectorate-victoria.
1.13. Further assistance
For further assistance contact:
Wage Inspectorate Victoria on 1800 287 287 or by email at odfc@wageinspectorate.vic.gov.au.
You can also visit www.vic.gov.au/wage-inspectorate-victoria.
The VSBC on 13 8722 or go to www.vsbc.vic.gov.au.
Your industry association, union or lawyer.
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