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Hirers

Understand your obligations under the Owner Drivers and Forestry Contractors Act 2005

On this page

  • Find out whether the Act applies to you
  • Understand the requirements for hirers under the Act
  • Learn what the penalties are for non-compliance

Owner Drivers and Forestry Contractors Act 2005

The Owner Drivers and Forestry Contractors Act 2005 aims to improve the position of owner drivers and forestry contractors who run small businesses transporting goods or harvesting forestry products.

The Act provides owner drivers and forestry contractors with some protections when they contract out their services. It requires that they are provided with certain information to assist in running a successful business. It also sets out a framework for resolving disputes.

Hirers and freight brokers in the transport and forestry industries have legal obligations under this Act, which was amended on 1 May 2020. It is important that they fully understand these obligations.

What is a hirer?

Under the Owner Drivers and Forestry Contractors Act 2005, a hirer is a person or company that engages one of the following contractors to transport goods or forest products:

  • owner drivers that transport goods (not passengers)
  • haulage contractors working in forestry
  • harvesting contractors working in forestry
  • tip truck owner drivers working in building and construction.

How do recent changes to the Act affect hirers?

Hirers in the transport and forestry industries have legal obligations under the Act, which was amended on 1 May 2020. It is important to fully understand these obligations.

From 1 May 2020, offences apply to freight brokers who do not comply with their obligations under the Act. Enforcement actions may include warning notices, penalty infringement notices and, in more serious cases, litigation.

However, to give the industry time to understand and meet their obligations under the amended Act, for six months from 1 May 2020 the Inspectorate will focus on providing information and education rather than litigation.

Hirers found to have breached their statutory obligations prior to 1 December 2020 will not be subject to litigation and will instead receive a formal warning.

Obligation to provide information

The Owner Drivers and Forestry Contractors Act 2005 sets out a number of requirements to ensure owner drivers and forestry contractors have important information about their business and their contracts.

Hirers that engage an owner driver or forestry contractor for 30 days or more must make sure the owner driver or forestry contractor has:

  • a copy of the information booklet that applies to their industry
  • the rates and cost schedule that relates to their vehicle or equipment.

The owner driver or forestry contractor must receive the information booklet and rates and cost schedule:

  • at least three days before the owner driver or forestry contractor is engaged – if the owner driver or forestry contractor will be engaged for at least 30 days
  • on the 30th day – if the owner driver or forestry contractor is engaged for a total period of at least 30 days in any three-month period.

This obligation does not apply if a hirer engaged the owner driver or forestry contractor through a freight broker.

Penalties

The maximum penalty for failure to provide an information booklet to a contractor before entering into a contract is:

  • 25 penalty units in the case of a body corporate
  • 5 penalty units in any other case

Victorian Owner Drivers Information Booklet (DOC 263 KB)DOC icon

Victorian Forestry Contractors Information Booklet (DOCX 159 KB)DOCX icon

The maximum penalty for failure to provide the relevant rates and costs schedule to a contractor before entering into a contract is:

  • 25 penalty units in the case of a body corporate
  • 5 penalty units in any other case

Rates and costs schedules for owner drivers

Rates and costs schedules forestry contractors

Rates and costs schedules for tip truck drivers

Obligation to use written contracts

Written contracts, especially for long-term arrangements, are good business practice. They help reduce disputes and uncertainty. Written contracts do not have to be long, or complex and legalistic. It is a good idea to set out in writing the most important aspects of your arrangements.

The Owner Drivers and Forestry Contractors Act provides that ongoing engagements of no fixed duration or for a period of 30 days or more must be in writing.

The written contracts must set out:

  • the guaranteed minimum hours of work or income level that the contractor will receive
  • the rates to be paid to the contractor
  • the minimum amount of notice to terminate the contract or payment in lieu of notice

Penalties

The maximum penalty for failure provide a written contract for ongoing engagements of no fixed duration or for a period of 30 days or more is:

  • 25 penalty units in the case of a body corporate
  • 5 penalty units in any other case

This maximum penalty would also apply for failure to provide notice of termination or payment in lieu under the above types of written agreement.

Model contract for owner drivers

Model contract for forestry contractors

Obligation to provide notice of termination

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 (except in the case of serious and wilful misconduct by the contractor). The requirement to give a minimum period of notice only applies where the engagement proceeds beyond three months.

The minimum notice periods are:

  • forestry contractor: 3 months
  • owner driver of heavy vehicle: 3 months
  • other owner driver: 1 month

Where an owner driver or forestry contractor considers that the notice period is not needed, they may contact the Small Business Commissioner. The Commission may then issue a certificate to waive this requirement.

Right to use negotiating agents

Hirers can ask an agent to negotiate contracts on their behalf. Model forms which can be used to appoint a negotiating agent are available.

Appointing a negotiating agent: owner drivers

Appointing a negotiating agent: forestry contractors

Access to dispute resolution

Under the Owner Drivers and Forestry Contractors Act 2005, hirers and contractors can contact the Victorian Small Business Commission to arrange fast and low-cost alternative dispute resolution if disagreements arise. The dispute resolution process can be used for disputes arising under or in relation to the Act, Code of Practice or in relation to a contractor or a hirer.

Disputes that are not resolved by the Small Business Commission may be referred to the Victorian Civil and Administrative Tribunal for determination.

Wage Inspectorate Victoria

Wage Inspectorate Victoria is responsible for monitoring compliance with the Owner Drivers and Forestry Contractors Act 2005.

Wage Inspectorate Victoria is available to provide information and answer queries. Please call the Information Line on 1800 287 287 or email.

The Inspectorate supports best practice in the transport and forestry industries. It carries out education, auditing and inspections to ensure that industry participants understand and comply with the Act’s requirements.

Wage Inspectorate Authorised Officers

Wage Inspectorate Authorised Officers ensure that hirers are complying with the Act. They have powers to:

  • require information or documents
  • monitor compliance with the Act and Regulations
  • investigate possible contraventions of the Act and Regulations
  • perform any other function or exercise any other power under the Act or Regulations

Wage Inspectorate Authorised Officers have the power to enter premises with the consent of the occupier.

Wage Inspectorate Authorised Officers must show their identity card when asked, or when requesting to enter premises.

Penalties

A maximum penalty of 100 penalty units in the case of a body corporate or 60 penalty units 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

Make an anonymous report

If you suspect someone is breaking the rules relating to owner operators or contractors in transport or forestry, you can report it. Click here to fill out a report form. We will not ask you for personal information such as your name or contact details. We will not contact you about the information you have given us or ask you to be involved in our investigations.