Reduce uncertainty with written contracts
Written contracts, especially for long-term arrangements, are good business practice. They help reduce disputes and uncertainty. Written contracts do not have to be long, or complex and legalistic. It is a good idea to set out in writing the most important aspects of your arrangements.
Some types of engagements require written contracts
The Owner Drivers and Forestry Contractors Act 2005 requires hirers to use written contracts for ongoing engagements of no fixed duration or for a period of 30 days or more.
The written contracts must set out:
- the rates to be paid to the owner driver or forestry contractor
- the guaranteed minimum number of hours of work or income level that the owner driver or forestry contractor will receive
- the minimum amount of notice to terminate the contract or payment in lieu of notice.
Hirers may face penalties if they fail to meet these obligations.
Model contract
A model contract has been developed for use by owner drivers, forestry contractors and hirers. It is not compulsory to use the model contract but it might be useful as guidance on standard contract terms. Or you could use the model contract but vary certain terms to suit your business needs.
It is in 2 parts. The second part is the schedule to the contract, which both parties must fill in. The schedule sets out the agreed rates and a range of other matters.
Negotiating contracts
There are issues to consider when negotiating contracts. For example:
- under the Owner Drivers and Forestry Contractors Code of Practice(opens in a new window), a hirer seeking to engage an owner driver or forestry contractor must not make any representations that are false, misleading or deceptive
- under the Act, hirers and contractors cannot engage in ‘unconscionable’ conduct with respect to each other, including during contract negotiations. VCAT also has the power to vary contracts to fix unjust contract terms.
Appointing a negotiating agent
As an owner driver or forestry contractor (or a group of drivers or contractors), you can appoint an agent to negotiate contract conditions and rates on your behalf. Hirers can also appoint a negotiating agent.
Agents could include an accountant, consultant, trade union or industry association, or a colleague.
Owner drivers, forestry contractors and hirers are only required to negotiate with a negotiating agent if they have been given a copy of the agent’s instrument of appointment.
The following forms are model templates to appoint a negotiating agent:
You can use these to get started.
Once appointed, the agent can enter binding legal contracts on your behalf. It is important that you read the paperwork carefully before you appoint an agent.
Hirers, forestry contractors and owner drivers must not be coerced in relation to the appointment of negotiating agents.
Joint negotiations
Joint negotiations can take place between a hirer and multiple owner drivers or forestry contractors that are all contracted by that same hirer, but industry-wide negotiations are not allowed. Breaches of contract, strikes or boycotts are not allowed when conducting joint negotiations.
Owner drivers and forestry contractors may be offered a contract on the same terms as an existing jointly negotiated contract, but they must also be given the option of negotiating their own arrangements.
Varying contracts
According to the Owner Drivers and Forestry Contractors Code of Practice, hirers must negotiate with owner drivers and forestry contractors to vary their contract if:
- the hirer requests or requires the owner driver or forestry contractor to supply a different vehicle or motorised equipment
- if the owner driver or forestry contractor identifies a legitimate need to upgrade the vehicle or motorised equipment.
If the hirer requires particular specifications for the different vehicle or motorised equipment, they must also provide these in writing.
If it is agreed that the owner driver or forestry contractor will supply the different vehicles or motorised equipment, the hirer must set out the offer in writing before the owner driver or forestry contractor purchases or supplies it.
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