This month we have seen the introduction of new legislation as part of the ‘Closing loopholes’ process, meaning the legislation is now in place and the proof of the pudding will be in eating.
As with all of these reforms over the years, the initial ideas which were put forward at the beginning of this process will have been compromised or altered going through the process of developing the legislation and within the legislation, often there are loopholes within loopholes which will only come to light when any of the powers enabled in the legislation meet the country’s legal system.
For owner drivers the reforms do look like they may be able to make the relationship for subcontractors to the larger freight customers more secure with rules against unfair contracts which often benefit only the larger more powerful party in the contract.
Also the introduction of the Fair Work Commission into the process will give hope to some of the smaller operations, which can often feel bullied by larger companies and corporates. Anything which gives the small trucking operators a bit more leverage when it comes to negotiating a contract is going to be useful in maintaining viability and profitability at the smaller end of the trucking industry.
If there are any problems with these latest changes to the regulations then, we will not find out until later down the track when the big companies get the large corporate law firms to enable them to maintain their commercial advantage and to continue to pass on as little as possible of the profit in a transaction, while getting the efficient service they required to fulfil their contract with their customer.
Also the involvement of the FWC in the process being developed on unfair termination for owner drivers should bring more clarity and stability into a business relationship which can often be fraught. Much bigger operations can use their economic power when hiring and firing contractors.
It appears these reforms have been thought through and the changes have been largely welcomed by industry associations and there appears to be some goodwill towards the whole process. However, it is still the case of the proof of the pudding being in the eating and we can be sure that there will be issues around this legislation. Some of it may be positive but some of it may be negative and we need to be prepared for issues which can develop over time.
Fortunately, this new legislation is being brought in at the time of a relatively buoyant economy. However, the true test of this new legislation will be when economic times get a little tougher and margins begin to get squeezed. This will be the point of which we can really assess whether this new legislation really has had the effect for which it was intended.
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