s 536JY - Commission may make minimum standards orders for employee-like workers and regulated road transport contractors

s 536PD - Commission may make a road transport contractual chain order

Applications by Transport Workers' Union of Australia

Fair Work Act 2009, Chapters 3A and 3B - Commission may make employee-like minimum standards orders and road transport minimum standards orders - Commission may make road transport contractual chain orders - Applications from the Transport Workers' Union of Australia - submissions received - Road Transport Advisory Group - consultation process.

• [1] This Statement outlines a process for obtaining prioritisation advice from and engaging in initial consultation with the Road Transport Advisory Group (RTAG) regarding three applications to make minimum standards orders. It also sets out my provisional view that an additional application to make a road transport contractual chain order should be included in that process.

• [2] On 28 August 2024 the Transport Workers' Union of Australia (TWU) lodged three applications for minimum standards orders (MSOs) covering certain employee-like workers and regulated road transport independent contractors (MS2024/1, MS2024/2 and MS2024/3). The TWU lodged a fourth application on 26 September 2024 (MS2024/4). That application is for the Commission to make a road transport contractual chain order under s 536PD of the Fair Work Act 2009 (Cth) (FW Act).

• [3] On 6 September 2024 I issued a statement setting out provisional views in relation to the consultation process for MS2024/1, MS2024/2 and MS2024/3.[1] On that date I also constituted an Expert Panel for the road transport industry for the purposes of facilitating the consultations. The provisional views I expressed were:

1. An Expert Panel for the road transport industry is required to be constituted for the hearing and determination of matter MS2024/2. I proposed to constitute such a panel in due course.

1. Matters MS2024/1 and MS2024/3 relate to the road transport industry as defined. I proposed to direct that those applications be heard and determined by an Expert Panel for the road transport industry. Given that matters MS2024/1 and MS2024/2 both relate to 'last mile package delivery' (in relation to employee-like workers and regulated road transport contractors respectively), I invited the views of interested persons as to whether these two applications should be dealt with jointly by a single Expert panel for the road transport industry.

1. I propose to seek the advice of the RTAG in relation to matters MS2024/1, MS2024/2, and MS2024/3. To allow time for the RTAG to consult, through subcommittees or otherwise, and formulate its advice, I will ask that the RTAG provide this advice not later than 12:00 pm (AEDT) on Friday, 6 December 2024 (subject to any request for further time to be allowed). Further advice from the RTAG may be sought in the course of these matters.

• 4. I propose to seek the advice of the RTAG in relation to determining priorities for the work of the Commission in relation to matters MS2024/1, MS2024/2, and MS2024/3.[2]

• [4] The Statement invited interested persons to make submissions about the provisional views. The Commission received eight submissions from the following entities and individuals which were published on the Commission's website:

• • DoorDash[3]
• • Australian Chamber of Commerce and Industry (ACCI)[4]
• • Menulog Pty Ltd (Menulog)[5]
• • Uber[6]
• • TWU[7]
• • Australian Business Industrial and Business NSW (ABI)[8]
• • Australian Industry Group (Ai Group)[9]
• • Mr Adrian Boothman.[10]

• [5] In relation to the proposed conduct of the three applications for MSOs, the parties' submissions generally agreed with, or did not oppose, the view that an Expert Panel for the road transport industry should be constituted for matter MS2024/2.[11]

• [6] As to the other provisional views related to the conduct of other applications, the parties' views differed. The TWU agreed with my provisional view that MS2024/1 and MS2024/3 be dealt with by expert panels for the road transport industry and that MS2024/1 and MS2024/2 be dealt with jointly.[12] Some digital platform businesses or business representatives (business parties) did not support those provisional views. While the business parties' submissions acknowledged that both application MS2024/1 and MS2024/3 might relate to the road transport industry, they submitted that the FW Act does not require applications to make minimum standards for employee-like workers to be determined by an Expert Panel for the road transport industry and expressed caution about joining matters in the initial stages of the proceedings.[13]

• [7] Some business parties expressed views that there may be more commonality between the two employee-like applications (MS2024/1 and MS2024/3) in terms of parties involved and mode of delivery than between the two applications dealing with last-mile package delivery (MS2024/1 and MS2024/2).[14]

• [8] In relation to the proposed referral of the three applications for MSOs to the RTAG, parties who made a submission on the matter generally acknowledged that MS2024/2 must be the subject of consultation with the RTAG.[15]

• [9] The TWU submitted that it is open to me to refer applications MS2024/1 and MS2024/3 to the RTAG for advice generally as the applications relate to the road transport industry and as a result the provision of advice about them is within the RTAG's functions.[16] The ACCI did not support the referral of the two applications to RTAG, although it acknowledged that it was open to me to do so. The ACCI submitted that the RTAG, as currently structured, did not possess the expertise to advise on matters relating to digital labour platforms in a fair and balanced manner.[17] Some of the business parties' submissions put the view that the RTAG should not be consulted in relation to MS2024/1 and MS2024/3 other than in relation to how the Commission should prioritise its work in relation to the road transport industry.[18] Uber submitted that a referral to RTAG for substantive (as opposed to prioritisation) advice should not occur yet and that such advice should be sought in relation to discrete questions.[19]

• [10] The parties who expressed a view on the matter did not oppose consultation with the RTAG about the prioritisation of the Commission's work in relation to the road transport industry.[20]

• [11] The TWU submission supported the RTAG being asked to provide advice about prioritisation of the Commission's work in relation to MS2024/1, MS2024/2 and MS2024/3. Business parties did not oppose advice being sought from RTAG regarding prioritisation, although they submitted that interested parties should be notified of the proposed course and given the opportunity to make submissions. They submitted that there should be consultation with interested parties regarding priorities for the work of the Commission in addition to consultation with the RTAG.[21]

• [12] The majority of parties made submissions about the processes to be followed by the RTAG. Most were of the view that I should give the RTAG directions under s 40F(5) of the FW Act as to the way in which the RTAG is to carry out its functions[22]. The TWU did not express a view as to any direction I may give the RTAG. There was variance in the detail of the directions proposed by those parties that did make a submission. A common thread among the proposals was a need for transparency with respect to the RTAG's processes and the advice given[23].

Application to make a road transport contractual chain order - MS2024/4

• [13] The TWU lodged a fourth application on 26 September 2024. That application seeks that the Commission make a road transport contractual chain order under s 536PD of the FW Act.

• [14] The description of the work to be covered by the proposed order is, broadly, the transport by road of goods and other materials. This substantially replicates to a significant extent the work falling within the definition of road transport and distribution industry at clause 4.2 of the Road Transport and Distribution Award 2020.[24] The terms sought in the proposed order include 30-day payments terms, a prohibition on automatic reduction or set-off terms in contracts, and a compulsory rate review term.[25]

• [15] Section 617(10B) of the FW Act requires that a road transport contractual chain order be made by an Expert Panel for the road transport industry. Section 620(1E) contains requirements for the constitution of such an expert panel.

• [16] Section 536PF(2)(b) of the FW Act requires that the Commission not make or vary a road transport contractual chain order unless the RTAG has been consulted. Similarly to minimum standards orders, there must be genuine engagement with the parties to be covered by any road transport contractual chain order (s 536PF(2)(a)) and affected entities must be given a reasonable opportunity to make written submissions on a draft of the order (s536PH(1)) (see Attachment A).

• [17] Two submissions made in response to the 6 September 2024 Statement expressed a view as to how MS2024/4 should proceed. The TWU submission submitted that MS2024/4 should also be allocated to an Expert Panel for the road transport industry and that the RTAG should be consulted in relation to the matter.[26] Ai Group's submission is that MS2024/4 should be referred to RTAG for prioritisation advice, but that all parties should be given a further opportunity to comment on prioritisation if the Commission proposes dealing with all four applications simultaneously.[27]

• [18] A number of the responses to the provisional views in the 6 September 2024 Statement express concerns about the role which the RTAG might play in respect of applications for MSOs for employee-like workers. There appear to be two main, albeit overlapping, concerns. The first is that an advisory/consultative process involving the RTAG will deny a proper opportunity for parties which consider themselves outside the road transport industry, such as digital platform businesses, to be consulted and make submissions. The second is that the RTAG lacks expertise and representation in respect of the digital platform sector.

• [19] In respect of the first concern, it must be emphasised that, while the FW Act requires that the Commission consult and have regard to the views of the RTAG in certain circumstances (and that I do so in relation to prioritisation), this is not a substitute for the Commission's deliberative processes.[28] The RTAG's role is one part of a statutory framework for the consideration of MSOs and road transport contractual chain orders. The Commission has a range of separate consultation obligations it must fulfil and statutory objectives to be satisfied of in determining applications before it. This includes the Commission's obligations to be satisfied there has been genuine engagement with the parties to be covered by an order[29] and to ensure affected person and bodies have a reasonable opportunity to make submissions on a draft order.[30]

• The Commission also has an overarching duty to afford procedural fairness.

• [20] Consistent with that principle, the Commission will publish any advice it receives from the RTAG and ensure that all parties have a proper opportunity to make submissions to the Commission in relation to the advice, and in relation to any application generally, before the Commission proceeds to make any MSO or contract chain order.

• [21] In relation to both the first and second concerns, my expectation is that when it comes to seeking substantive advice from the RTAG about an application affecting employee-like workers, or indeed any subsector with particular characteristics, the RTAG will establish a subcommittee under s 40G to provide it with specialist advice. My further expectation is that any such subcommittee will be broadly inclusive and representative of those affected by the application and that the subcommittee itself will consult widely and invite proposals and submissions.

• [22] I consider that the appropriate course is, initially, to obtain advice from the RTAG about the appropriate prioritisation of matters MS2024/1, MS2024/2, MS2024/3, consistent with the fourth provisional view in the 6 September 2024 Statement. I will also ask the RTAG, at this initial state, to provide advice about how it proposes to undertake the process of substantive consultation and advice in respect of any of the matters referred to it. I expect that the matters stated in [19]-[21] above will be taken into account in the provision of such advice. Parties will be given an opportunity to comment on such advice once it is received. I confirm the first and second provisional views in the 6 September 2024 Statement subject to the proviso that I will defer consideration as to whether matters MS2024/1 and MS2024/2 should be dealt with jointly until after the RTAG has provided its advice as to prioritisation and parties have had the opportunity to comment on that advice. In respect of the third provisional view, I intend to refer the matter(s) which I ultimately determine to be of priority to the RTAG for substantive advice on the premises stated in [19]-[21] above.

Next steps in relation to MS2024/1, MS2024/2 and MS2024/3

• [23] Further to my 6 September 2024 Statement and the matters outlined above, I will issue a written direction to the RTAG, pursuant to my power under s 40F(5), that it provide:

1. Advice on the prioritisation of matters MS2024/1, MS2024/2, MS2024/3.

1. In relation to the matter or matters RTAG identifies as priorities, a proposed process for providing its advice in relation to those matters. My written direction will require the RTAG to specify when consultation will occur and whether any additional entities should be served each application, as well as whether subcommittees will be formed and how any subcommittees will be composed and operated. I will direct the RTAG to seek to be inclusive and broadly representative in determining the membership of subcommittees.

1. Advice on how it proposes to conduct itself more generally, including any proposed terms of reference or similar document that could form the basis for a written direction I may make pursuant to s 40F(5), taking into account the need to be open and transparent in the way it conducts itself.

• [24] The RTAG will be directed to provide this advice not later than 12:00 pm (AEDT) on Friday, 6 December 2024 (subject to any request for further time).

• [25] Any written directions I provide to the RTAG will be published on the Commission's website. As noted further above at [20], the RTAG's advice will be published. I will then confirm with parties the timing for the making of submissions in relation to that advice and the further steps that should be taken in the conduct of the matters. Following that process I will then issue a Statement:

1. confirming the Commission's priorities in relation to the applications, including the form of any prioritisation direction I will issue under s 582(4D);

1. setting out next steps in relation to the conduct of the matter or matters identified as priorities, including whether the prioritised matter or matters will be dealt with by a Full Bench or Expert Panel for the road transport industry, whether any matters will be dealt with jointly, and the provision of RTAG substantive advice in relation to those matters;

1. indicating the form of any direction I will issue under s 40F(5) as to how the RTAG is to perform its functions.

• [26] My provisional views in relation to the conduct of MS2024/4 are as follows:

1. An Expert Panel for the road transport industry is required to be constituted for the hearing and determination of matter MS2024/4 and I propose to constitute such a panel in due course.

1. As an initial step, the Expert panel for the road transport industry constituted for consultation purposes in relation to MS2024/1, MS2024/2 and MS2024/3 will also be tasked with facilitating consultation in relation to MS2024/4.

1. I propose to seek advice from the RTAG in relation to prioritisation of the application, simultaneously with MS2024/1, MS2024/2 and MS2024/3. This will allow all of the applications the Commission has received at this point to be considered as part of a single prioritisation process.

• [27] Because MS2024/4 was not the subject of my last Statement, but noting that some parties provided submissions in relation to this application, I propose to allow an additional 7 days for interested parties to make submissions regarding my provisional view expressed at [26]. All submissions should be sent to rws@fwc.gov.au by 12:00 pm on (AEDT) on Friday, 25 October 2024.

• [28] If there are any objections to my provisional view, I will issue a Statement outlining any next steps. In the absence of any objections, I will include MS2024/4 in the list of matters about which the RTAG is to provide advice as set out at [23].

[1] [2024] FWC 2438.

[2] See [2024] FWC 2438 [21].

[3] DoorDash, 'DoorDash Submission re MS2024/3, Submission in MS2024/1, MS2024/2, and MS2024/3, 26 September 2024.

[4] Australian Chamber of Commerce and Industry, 'ACCI response to FWC Statement - conduct of proceedings [2024] FWC 2438', Submission in MS2024/1, MS2024/2, and MS2024/3, 27 September 2024.

[5] Menulog Pty Ltd, 'Submission on Justice Hatcher's provisional views on applications by Transport Workers' Union of Australia (MS2024/1, MS2024/2 and MS2024/3) in 6 September 2024 Statement', Submission in MS2024/1, MS2024/2, and MS2024/3, 27 September 2024.

[6] Uber, 'Uber Submissions in Relation to the Statement of President Justice Hatcher Dated 6 September 2024', Submission in MS2024/1, MS2024/2, and MS2024/3, 27 September 2024.

[7] Transport Workers' Union of Australia, 'Transport Workers' Union of Australia response to the President's statement', Submission in MS2024/1, MS2024/2, and MS2024/3, 27 September 2024.

[8] Business NSW & Australian Business Industrial, 'Applications by Transport Workers' Union of Australia (MS2024/1, MS2024/2 and MS2024/3), Submission in MS2024/1, MS2024/2, and MS2024/3, 27 September 2024.

[9] Australian Industry Group, 'Submission (MS2024/1, MS2024/2 and MS2024/3)', Submission in MS2024/1, MS2024/2, and MS2024/3, 3 October 2024.

[10] A Boothman, 'Submission (MS2024/3) in support of the Transport Workers' Union of Australia', 18 September 2024 and 'Submission in response to Ai Group', 3 October 2024.

[11] ACCI [4], TWU [1]a; Ai Group [16].

[13] ACCI [6]-[10]; ABI 2; Ai Group [18], [21]-[24].

[14] ACCI [7]-[10]; Ai Group [22]; Uber 2-3.

[17] ACCI [12], see also Ai Group [44].

[18] See DoorDash [3]-[4]; ACCI, [12]; Menulog 3-4; Ai Group [33].

[20] See Ai Group [29]; TWU [7]; Uber 5.

[21] Ai Group [38]-[40]; ACCI [12]; DoorDash [5]-[6].

[22] See ACCI [21]; Ai Group [43]-[50]; DoorDash [5]-[6]; Menulog 4; Uber 5-6.

[23] See ACCI [21]; Ai Group [49]; DoorDash [5]; Menulog pp 4; Uber 5-6.

[24] MA000038.

[25] MS2024/4.

[29] ss 536K(4)(a), 536KA(2)(a) and 536PF(2)(a).

[30] ss 536KAB(1), 536KC(1) and 536PH(1).

Printed by authority of the Commonwealth Government Printer

536PH Affected entities to have a reasonable opportunity to make submissions on a draft road transport contractual chain order

(1) The FWC must ensure that affected entities have a reasonable opportunity to make written submissions to the FWC for its consideration in relation to the draft of a road transport contractual chain order published under paragraph 536PG(1)(b).

(2) The FWC must publish submissions made to the FWC.

(3) However, if a submission made by an entity includes information that is claimed by the entity to be confidential or commercially sensitive, and the FWC is satisfied that the information is confidential or commercially sensitive, the FWC:

(i) a summary of the information which contains sufficient detail to allow a reasonable understanding of the substance of the information (without disclosing anything that is confidential or commercially sensitive); or

(ii) if the FWC considers that it is not practicable to prepare a summary that would comply with subparagraph (i) - a statement that confidential or commercially sensitive information in the submission has not been published.

(4) The publishing of material under subsections (2) and (3) must be on the FWC's website and by any other means the FWC considers appropriate.

(5) A reference in this Act (other than in this section) to a submission under this section includes a reference to a summary or statement referred to in paragraph (3)(b).

(6) For the purposes of subsection (1), an affected entity, in relation to a draft road transport contractual chain order published under paragraph 536PG(1)(b), is:

(a) a person or body likely to be affected by the making of a road transport contractual chain order based on the draft; or

(b) a person or body prescribed by the regulations, or included in a class prescribed by the regulations.

(7) The FWC may, but is not required to, hold a hearing in relation to a draft road transport contractual chain order.

536PF Particular matters FWC must take into account in making a decision on a road transport contractual chain order

(a) an application is made for a road transport contractual chain order under subsection 536PE(1) or for a variation of a road transport contractual chain order under section 536PS; or

(b) the FWC is considering making or varying a road transport contractual chain order on its own initiative.

(a) must not make or vary the road transport contractual chain order unless there has been genuine engagement with the parties to be covered; and

(b) must not make or vary the road transport contractual chain order unless the Road Transport Advisory Group has been consulted; and

(c) must not make or vary the road transport contractual chain order unless the consultation process set out in Subdivision C of this Division has been followed; and

(d) in deciding whether to make or vary the road transport contractual chain order, must have regard to the commercial realities of the road transport industry, including commercial practices in relation to part load, mixed load, no load, multi‑leg and return trips; and

(e) must not make or vary the road transport contractual chain order unless the FWC is satisfied that making or varying the road transport contractual chain order will not unduly affect the viability and competitiveness of road transport businesses, owner drivers or other similar persons; and

(f) in deciding whether to make or vary the road transport contractual chain order, must take into account any current or proposed road transport contractual chain orders and any current or proposed minimum standards orders; and

(g) must take reasonable steps to ensure that the coverage of the road transport contractual chain order is clear.