Owner Drivers and Forestry Contractors Regulations 2017

Contractors frequently have limited working capital. This means it is not reasonable to expect them to carry operating costs for excessive periods. The period allowed for payment of invoices should provide for regular payments sufficient in the circumstances for the contractor to maintain a reasonable cash-flow to operate their business. Under section 24A of the Act, hirers must pay contractors within 30 days after receiving an invoice, unless there is a dispute over the amount payable or a different payment period has been agreed that is not unfair to one of the parties.

Guidance

Unless a hirer and contractor agree to a different payment period that is not unfair to one of the parties, a contract term that allows the hirer to pay the contractor more than 30 days after receiving an invoice is likely to constitute an unjust term for the purposes of section 44(1)(g) of the Act.

Further, it is likely to constitute unconscionable conduct within the meaning of section 31 of the Act if the hirer has engaged in a pattern of conduct of regularly being late in paying the contractor's invoices, paying only part of the amount owed or failing to pay at all.

Example 14 to Sch. 1 Pt 2 cl. 14 substituted by S.R. No. 4/2021 reg. 13(3).

Example 14

Bob works as a long-distance driver. Section 24A of the Act requires the hirer to pay him within 30 days, unless a different payment period has been agreed that is not unfair or there is a dispute over the amount payable. Bob's contract is silent on when he should be paid, but his hirer regularly pays Bob after 90 days, and sometimes even later than that. Bob complained but the hirer told him "you'll get paid if and when we get paid". In these circumstances, payment more than 30 days after receipt of an invoice is likely to breach section 24A of the Act. Furthermore, this is likely to constitute unconscionable conduct within the meaning of section 31 of the Act.