1Objectives

The objectives of these Regulations are—

(a)

to prescribe persons of a specified class not to be contractors for the purposes of the Owner Drivers and Forestry Contractors Act 2005 and these Regulations; and

(b)

to prescribe a code of practice in relation to the engagement of contractors who are owner drivers or forestry contractors; and

(c)

to prescribe infringement offences under the Act and penalties for those offences; and

(d)

to prescribe other matters authorised under the Owner Drivers and Forestry Contractors Act 2005.

2Authorising provisions

These Regulations are made under sections 27 and 66 of the Owner Drivers and Forestry Contractors Act 2005.

3Commencement

These Regulations come into operation on 21 October 2017.

4Revocation

The Owner Drivers and Forestry Contractors Regulations 2006^[1] are revoked.

5Definition

In these Regulations—

the Act means the Owner Drivers and Forestry Contractors Act 2005.

6Persons of a specified class prescribed not to be contractors

The following specified classes of person are prescribed not to be contractors—

(a)

a natural person carrying on a business (whether solely, in partnership or otherwise) of transporting goods, other than forest products, in 4 or more vehicles supplied by the business and operated by the person (whether solely or with the use of additional or relief operators);

(b)

a body corporate carrying on a business of transporting goods, other than forest products, in 4 or more vehicles supplied by the body corporate or an officer of the body corporate and operated by an officer of the body corporate (whether solely or with the use of additional or relief operators).

7Prescribed code of practice

For the purposes of Part 3 of the Act, Schedule 1 is prescribed as the code of practice.

Reg. 8 inserted by S.R. No. 4/2021 reg. 6.

8Infringement offences and infringement penalties

(1)

For the purposes of section 60N(1) of the Act, an offence specified in Column 2 of Schedule 2 is prescribed as an infringement offence.

(2)

For the purposes of section 60N(3) of the Act, the prescribed infringement penalty for an infringement offence is the penalty set out in the corresponding entry in Column 3 of Schedule 2 in respect of that infringement offence.

1Objectives

The objectives of this Code are—

(a)

to provide for certain mandatory requirements concerning the engagement of contractors; and

(b)

to provide guidance to hirers and contractors on—

(i)

conduct which is likely or unlikely to be unconscionable conduct within the meaning of sections 31 and 32 of the Act, including by providing examples of conduct that in the absence of any special circumstances is likely to be, or not to be, unconscionable conduct within the relevant industry context; and

(ii)

contract terms which are likely or unlikely to constitute unjust contract terms within the meaning of section 44(2) of the Act, including by providing examples of contract terms that in the absence of any special circumstances, are likely to be, or not to be, unjust contract terms within the relevant industry context; and

(c)

to ensure a competitive and fair operating environment by promoting the following principles to guide business relations between hirers and contractors—

(i)

parties to a contract should be able to operate their respective businesses without unfair business practices being used against them;

(ii)

contractors are entitled to be paid the agreed rate for their services;

(iii)

hirers are entitled to have work performed to a satisfactory standard;

(iv)

parties to a contract should clearly communicate their expectations and requirements and any plans that may affect the other party's interests;

(v)

hirers should offer and pay contractors remuneration that, considering the contract as a whole, the services to be performed and the general market for those services, enables the contractor to meet efficient operating expenses, receive a fair return for the contractor's own labour and a return on an investment.

2Interpretation

(1)

In this Code—

contract means a regulated contract within the meaning of section 3 of the Act;

the Act means the Owner Drivers and Forestry Contractors Act 2005.

(2)

If the term contractor is used in this Code in a context that applies only to a natural person, the term refers—

(a)

in the case of a contractor who is a natural person—to that person; and

(b)

in the case of a contractor who is a partnership—to any of the partners; and

(c)

in the case of a contractor who is a company—to an officer of the company.

Note to Sch. 1 Pt 1 cl. 2(2) amended by S.R. No. 4/2021 reg. 8.

Note

All terms used in this Code have the same meaning as provided by the Act unless the context requires otherwise.

Contractor is defined in section 3 of the Act to mean an owner driver, a haulage contractor or a harvesting contractor.

See in particular the following definitions in the Act—the definition of hirer in section 3, the definition of owner driver in section 4, the definition of haulage contractor in section 5 and the definition of harvesting contractor in section 6.

The definition of contractor is affected by the Owner Drivers and Forestry Contractors Regulations 2017. Those Regulations limit the definition of contractor, in relation to owner drivers carrying on a business of transporting goods other than forest products, to contractors that supply up to a maximum of 3 vehicles.

3Application

(1)

This Code applies to hirers and owner drivers, harvesting contractors and haulage contractors.

(2)

If a provision of this Code is preceded by the following heading—

Mandatory Requirement

the provision must be complied with by the person to which it applies.

Note

Section 30 of the Act provides that a person to whom a code of practice applies must comply with the code of practice to the extent that it imposes duties or obligations on the person or prohibits the person from engaging in certain conduct.

(3)

Part 5 contains provisions which include examples that relate to forestry contractors. Examples set out in any Part of this Code may be used as guidance in respect of the Act for hirers and all kinds of contractors, be they owner drivers, harvesting contractors or haulage contractors.

4Unconscionable conduct during negotiations

This Code does not prevent hirers or contractors from acting vigorously in their own commercial interests. However, each party should deal with the other party or parties fairly and in good faith when negotiating a new contract or a variation to a contract.

Guidance

In the absence of any special circumstances, if a hirer or a contractor engages in the conduct described below, that conduct is likely to be unconscionable conduct within the meaning of sections 31 and 32 of the Act.

(1)

A party, by themselves or through an agent—

(a)

does not provide a reasonable opportunity to discuss an offer, or makes offers on a "take it or leave it" basis suggesting a party must accept an offer and refuses to consider any alternative offer; or

Note

A party may use a template contract in a manner that provides reasonable opportunity for discussion of the contract and consideration of alterations to it.

(b)

does not genuinely consider offers made to them; or

(c)

does not provide a reasonable opportunity for another party to properly examine and consider offers, or to obtain legal, financial or other advice, including in the party's preferred language; or

(d) disguises the terms of a contract using fine print, unnecessarily difficult language or deceptive lay-out or headings; or

(e) summarises the meaning of a document to another party but omits to mention important terms in a way that is misleading; or

(f)

fails to correct another party's misunderstanding, where the hirer or contractor knew or reasonably ought to have known that the other party was under a serious misapprehension about the terms of the agreement or any other relevant matter.

(2)

A party builds up reasonable commercial expectations in another party for the renewal of an agreement and then exploits those expectations to extract a harsh or one-sided deal from the other party.

(3)

A party attempts to pressure another party into accepting an offer by acting in breach of contract, or otherwise acting unlawfully, or by threatening to do so.

Example 4.1 to Sch. 1 Pt 2 cl. 4 amended by S.R. No. 4/2021 reg. 7(a).

Example 4.1

Wal was given a contract to look over. The clause about goods in transit insurance was complex and hard to read. Wal asked the company's manager whether it meant he had to take out a new policy. The manager said he was pretty sure the insurance arrangements hadn't changed but he wasn't really certain. Wal signed the contract and sent it with a letter saying he was told the insurance was the same as before, but asking that the company tell him if this wasn't right. The company didn't reply. A dispute arose later about some expensive goods damaged in an accident, and the company argued that Wal was obliged under the contract to take out the insurance. The company's failure to correct Wal's misunderstanding in circumstances where it was brought to its attention and not corrected is likely to constitute unconscionable conduct under section 31 of the Act, and Wal could notify a dispute to the Small Business Commission.

Example 4.2 to Sch. 1 Pt 2 cl. 4 amended by S.R. No. 4/2021 reg. 7(a).

Example 4.2

Ajani was looking for work. He responded to an advertisement seeking couriers. He was given a long and complicated contract. Ajani has trouble with English and said he needed to have a friend with good English read the documents. The manager said if Ajani wanted the job he would have to sign on the spot and pay $1000 to cover the "set up costs". Ajani was anxious to find work and the manager was persuasive, so he signed and paid. He later realised the contract paid well below the going rate and it was impossible to make a living from the rates paid. The company refused to refund the $1000. The company's conduct is likely to constitute unconscionable conduct under section 31 of the Act, and Ajani could notify a dispute to the Small Business Commission.

Example 4.3 to Sch. 1 Pt 2 cl. 4 amended by S.R. No. 4/2021 reg. 7(a).

Example 4.3

Bill works for a company that provides waterfront services using both contractors and its own employee drivers. Bill is planning to retire and is negotiating to sell his truck to the company. Bill persuades the other contractors to refuse to work unless Bill's demands are met. Bill and the other contractors' conduct may be in breach of their contracts and is also likely to be unconscionable conduct within the meaning of section 32 of the Act. The company could notify a dispute to the Small Business Commission and could also seek an urgent injunction in the Tribunal.

Additional guidance

Set out below are circumstances where parties need to take special care that they do not act unconscionably.

(1)

If a hirer is aware that a contractor lacks business experience or has difficulty with business language—

it is likely to result in unconscionable conduct within the meaning of section 31 of the Act in the circumstances that the hirer refuses to allow the contractor a reasonable opportunity to obtain an understanding of the contract so as to be able to protect the contractor's interests appropriately.

Example 4.4 to Sch. 1 Pt 2 cl. 4(1) amended by S.R. No. 4/2021 reg. 7(a).

Example 4.4

A company is seeking new contracts with its drivers. Even though the company knows Darren has problems with reading complex documents, the company insists the offer is only open for 24 hours. Darren feels pressured to sign even though he doesn't understand the contract and hasn't had a chance to get his accountant to read it for him. This conduct is likely to constitute unconscionable conduct under section 31 of the Act, and Darren could notify a dispute to the Small Business Commission.

(2)

If a party is in an unusually strong negotiating position in relation to another party because of a monopoly or otherwise limited market for the supply of the services—

the imposition of unduly harsh or one-sided contracts in these circumstances is likely to be unconscionable conduct within the meaning of either section 31 or 32 of the Act.

Example 4.5

Uri and Jack have an expensive specialised vehicle that can carry oversized farm machinery from sea ports to dealers. A machinery importer is the only business in Victoria with a need for this kind of vehicle. There are 2 possible scenarios in this situation of a limited market that may result in unconscionable conduct—

(a)

knowing that Uri and Jack have no other potential customers for their vehicle, the company tries to force a significant rate reduction that makes the business unprofitable; or

(b)

knowing that the company is reliant on their vehicle to perform its contracts with customers, Uri and Jack threaten to refuse to accept work over the busiest period of the year unless the company pays a significant rate increase.

The conduct described above is not an exhaustive description of conduct during negotiations that may be unconscionable conduct within the meaning of either section 31 or 32 of the Act.

Owner Drivers and Forestry Contractors Regulations 2017

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