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There are laws hirers and freight brokers must follow when engaging owner drivers or forestry contractors. Failing to comply with some of these laws is a crime.
If you are an owner driver or forestry contractor, the hirer or freight broker who engages you must adhere to the laws set out below. You can report a business you think is breaking these laws through our online form.
The Owner Drivers and Forestry Contractors Act 2005 and Owner Drivers and Forestry Contractors Regulations 2017 outline the requirements you must follow when engaging an owner driver or forestry contractor.
Who is an owner driver?
An owner driver is someone that runs a business transporting goods using up to 3 vehicles supplied by them. The owner of the business must also operate one of the vehicles.
Who is a forestry contractor?
A forestry contractor is someone that runs a business to:
- harvest forest products using motorised equipment that they supply
- transport forest products.
The contractor supplies the vehicles and operates at least one of them.
Requirements for hirers and freight brokers
A hirer is someone that engages an owner driver or forestry contractor.
A freight broker is a broker or agent that procures or arranges the engagement of an owner driver or forestry contractor by a hirer. This includes online platforms that facilitate the engagement of owner drivers or forestry contractors by hirers.
Providing information
If you are engaging an owner driver or forestry contractor for a total of 30 days or more in any 3-month period, you must ensure they receive the relevant:
Information booklet
Rates and cost schedules
- Owner driver rates and cost schedules
- Tip truck driver rates and cost schedules
- Forestry contractor rates and cost schedules
This information must be provided at least 3 business days before they start work.
Where the engagement was initially for fewer than 30 days within a 3-month period but is extended, this information must be provided on the 30th day of the engagement.
Tip truck owner drivers in construction must receive this information for engagements of any length of time.
The rates and cost schedules are regularly updated. You must provide the current version of these documents, which are available at the links above.
The maximum penalty for not providing an information booklet to a contractor before entering into a contract is:
- $4,939.75 in the case of a body corporate
- $987.95 in any other case
The maximum penalty for not providing the relevant rates and costs schedule to a contractor before entering into a contract is:
- $4,939.75 in the case of a body corporate
- $987.95 in any other case
Contracts must be in writing
You must use written contracts if the engagement is for 30 days or more or has no fixed end-date. The contract must include the:
- guaranteed minimum hours of work or income level
- rates to be paid
- minimum notice to end the contract or payment to be made instead of notice.
The maximum penalty for not providing a written contract for ongoing engagements of no fixed duration or for a period of 30 days or more is:
- $4,939.75 in the case of a body corporate
- $987.95 in any other case.
Terminating a contract
Hirers who want to terminate the contract of an owner driver or forestry contractor are required to give a minimum period of notice of termination or make payment in lieu of notice. The requirement to give a minimum period of notice only applies where the engagement proceeds beyond 3 months.
The minimum notice periods are:
- forestry contractor: 3 months
- owner driver of heavy vehicle (more than 4.5 tonnes GVM or ATM): 3 months
- other owner driver: 1 month
There is no requirement to give notice if the hirer is ending the contract because of serious and wilful misconduct by the owner driver or forestry contractor, or if the contractor is ending the contract because of a material breach by the hirer.
Where an owner driver or forestry contractor considers that the notice period is not needed, they may contact the Victorian Small Business Commission. The Commission may then issue a certificate to waive this requirement.
A hirer can choose whether to give the minimum notice period or make a payment instead of notice (how to calculate this payment is set out in the Act).
Hirers are responsible for keeping records of when they terminate an engagement with a contractor. If the hirer provided payment in lieu of notice to the contractor, they must record the date it was provided and the amount paid. See the section on record-keeping below.
The maximum penalty for not providing sufficient notice before ending a contract or making payment instead of giving notice is:
- $4,939.75 in the case of a body corporate
- $987.95 in any other case.
Protections for contractors
You must not subject or threaten an owner driver or forestry contractor to any detriment for:
- raising health and safety issues
- claiming their rights under the Owner Drivers and Forestry Contractors Act 2005 or the Code of Practice
- seeking to negotiate a proposed engagement or contract
- seeking to renegotiate an existing engagement or contract.
Unconscionable conduct
Hirers, owner drivers and forestry contractors must not engage in 'unconscionable conduct' with respect to each other, including during negotiations.
Generally speaking, unconscionable conduct occurs where a stronger party to a transaction exploits a weaker party in a way that is unreasonable or unfair. However, what may amount to unconscionable conduct or an unjust term will depend on all of the parties’ circumstances. It is important to seek legal advice on this.
Owner drivers, forestry contractors and hirers can refer allegations of unconscionable conduct or unjust contract terms to the VSBC for alternative dispute resolution. If not resolved, they can then be referred to VCAT.
Record keeping
You should keep records that show you are meeting your obligations under the Owner Drivers and Forestry Contractors Act 2005 because you may have to provide them to an investigator monitoring compliance.
Hirers must record:
- copies of any regulated contracts
- the name and contact details of the contractor
- the date on which the contractor was engaged
- if the hirer undertook a tender process to engage a contractor, the date on which the tender was lodged and the date the hirer accepted
- the period of the contractor’s engagement
- the date or dates on which the contractor was given the information booklet or the applicable rates and costs schedule and any records of them being given
- if an information booklet or the applicable rates and costs schedule was given by hand, a signed acknowledgement of receipt by the contractor
- if the hirer terminated the engagement of the contractor, the date on which the hirer terminated the engagement
- if the hirer provided payment in lieu of notice to the contractor, the date it was provided to the contractor and the amount paid.
Freight brokers must record:
- the name and contact details of the contractor
- the date on which the contractor was engaged
- the period of the engagement
- the date or dates on which the contractor was given the information booklet or the applicable rates and costs schedule and any records of them being given
- if the freight broker gave an information booklet or the applicable rates and costs schedule by hand, a signed acknowledgement of receipt by the contractor.
A maximum penalty of $17,783 in the case of a body corporate or $9,879.50 in any other case applies for:
- failure to produce documents relevant to an investigation
- unreasonably refusing to comply with an authorised officer’s request
- knowingly providing false information
Resolving disputes
Owner drivers, forestry contractors and hirers can arrange low-cost dispute resolution through the Victorian Small Business Commission (VSBC) for disputes relating to:
- the Owner Drivers and Forestry Contractors Act 2005
- the Code of Practice
- a contract.
Disputes that are not resolved by the VSBC may be referred to the Victorian Civil and Administrative Tribunal (VCAT) for determination. Generally, parties must go to the VSBC before going to VCAT.
Our role
Our role is to:
- provide information to contractors and hirers
- monitor compliance with the law
- investigate potential contraventions.
If we find contraventions of the law we may:
- issue a warning letter
- issue a penalty infringement notice
- start a criminal prosecution.
Report a business breaking the rules
Use our online form to report non-compliance with the law or to submit additional documents for an existing report.
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