Owner drivers and forestry contractors code of practice

Helping small businesses

The Victorian Government aims to improve the position of people who run small businesses transporting goods or harvesting forestry products. To help achieve this, it administers the Owner Drivers and Forestry Contractors Act 2005 (the Act) and the Owner Drivers and Forestry Contractors Regulations 2017 (the Regulations). The Regulations help explain how the Act works, and the Act and Regulations should be read together. The Owner Drivers and Forestry Contractors Code of Practice (the Code) forms part of the Regulations. This booklet contains a copy of the updated, current Code.

Legal obligations under the Act, Regulations and Code of Practice

Owner drivers, forestry contractors, hirers and freight brokers in the transport and forestry industries all have legal obligations under the Act, Regulations and Code of Practice. You cannot ‘contract out’ of these obligations. Following amendments to the Act in 2019, failure to comply with some of these legal obligations is a criminal offence and significant penalties can apply. Wage Inspectorate Victoria (Wage Inspectorate) helps inform, educate and assist people in relation to their rights and obligations, as well as monitoring compliance with the Act, Regulations and Code of Practice. More information about the Wage Inspectorate is provided below.

Who does the Code of Practice apply to?

However, all the examples contained in the Code of Practice may be used as guidance in respect of the Act for owner drivers, harvesting and haulage contractors, and their hirers, as appropriate.

Updates to the Code of Practice

The 2017 Regulations along with the Code of Practice were amended in 2021 and can be found at www.legislation.vic.gov.au/in-force/statutory-rules/owner-drivers-and-forestry-contractors-regulations-2017/002.

Some key changes include:

• if some contractors were represented in negotiations by an agent and some were not, those that were not represented should not be prevented from being offered a contract on the same terms and conditions negotiated by the agent
• a party to a dispute must not insist that the other party exhaust any process agreed between the parties before referring the dispute to the Victorian Small Business Commission
• before entering into negotiations to vary an existing contract, the hirer should provide the contractor with a copy of the applicable rates and costs schedule
• hirers must pay contractors within 30 days after receiving an invoice unless there is a dispute over the amount of payment or a different payment period has been agreed that is not unfair to one of the parties
• a new Part 6 has been added to outline record keeping requirements

What does the Code of Practice do?

The Code of Practice operates in four ways:

1. The Code of Practice describes industry best practice.
2. The Code of Practice sets out requirements for hirers and freight brokers to keep records to prove they are meeting their obligations.
3. The Code of Practice establishes mandatory requirements that must be complied with on matters such as misleading advertising, pay deductions, penalties and record keeping.
4. The Code of Practice provides extra guidance to hirers and contractors on conduct that is likely to be unconscionable and contract terms that are likely to be unjust contract terms. These matters may be considered by the Victorian Small Business Commission (VSBC) and the Victorian Civil and Administrative Tribunal (VCAT) in the event of a dispute.

Industry best practice

The Code of Practice specifies certain practices that are regarded as good or best practice in a number of circumstances, such as contract negotiations, dispute resolution and allocation of work. Hirers who adopt these practices can be confident that their conduct will not be found to be unfair or unconscionable.

Dispute resolution

The dispute resolution process can be used for disputes arising under or in relation to the Act, the Code of Practice or in relation to a contract.

The Code of Practice encourages parties to first attempt to settle disputes between themselves, before engaging in formal mechanisms under the Act.

To this end, the Code of Practice identifies as best practice a number of informal steps for dispute resolution that should be taken by the parties before using the formal mechanisms under the Act.

‘Unconscionable conduct’ is prohibited under the Act. Owner drivers, forestry contractors and hirers can refer allegations of unconscionable conduct or unjust contract terms to the VSBC for alternative dispute resolution. Generally, parties must go to the VSBC before going to VCAT.

If not resolved, a dispute can be referred to VCAT. 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
• declare that a debt is or is not owing
• any other order it considers fair, including declaring void any unjust term, inserting a term or otherwise varying a regulated contract term to avoid injustice.

If the hirer or freight broker has not complied with the requirements in relation to providing the relevant information booklet or rates and costs schedule, VCAT may also make an order that the owner driver or forestry contractor is paid a specified amount for their services under the contract.

Record-keeping requirements

From 1 March 2021, hirers and freight brokers are responsible for keeping records to prove they are meeting their obligations under the Act.

The requirements for record keeping are set out in Part 6 of the Code of Practice.

Hirers and freight brokers are required to keep records in relation to each engagement of a contractor. They must provide these records to an authorised officer if requested.

Under the Act, Wage Inspectorate Authorised Officers have the power to require information or documents, and it is an offence to fail to comply with this requirement.

Significant penalties can apply for:

• a failure, without reasonable excuse, to comply with a notice to produce documents or give information
• a failure, without reasonable excuse, to comply with a requirement to produce documents
• knowingly produce false or misleading documents without indicating the respect in which they are false or misleading

Where to go for help

Victorian Small Business Commission

For more information regarding dispute resolution please contact the Victorian Small Business Commission on 13 VSBC (13 8722), enquiries@vsbc.vic.gov.au or vsbc.vic.gov.au

Wage Inspectorate Victoria

The Wage Inspectorate can also guide parties through dispute resolution processes.

The Wage Inspectorate may take enforcement action, such as issuing a warning or penalty infringement notices, or prosecute a hirer or freight broker in the Industrial Division of the Magistrates’ Court of Victoria for failing to comply with any requirements under the Act.

If you have any questions about the Code of Practice, or about your rights and obligations under the Act and Regulations, the Wage Inspectorate can help.

Please call their Information Line on 1800 287 287 or email odfc@dpc.vic.gov.au