Owner-drivers key to industry‘s success

In Road Transport Forum, March 20215 MinutesBy NZ Trucking magazineApril 19, 2021

The 21st century is about having more options when it comes to work. Owner-drivers in the road transport industry are no different. They want choices about how and when they work and enjoy the variety that can come from carting different types of freight around different parts of the country for different organisations. They also want a job that they can fit around their personal and home lives. The flexibility, responsiveness and efficiency that ownerdrivers provide road transport companies are also some of our industry‘s greatest strengths. This is why the Road Transport Forum (RTF) has been so concerned about government proposals to change the way contracting relationships work. Broadly, what was proposed in a discussion document from the Ministry of Business, Innovation and Employment (MBIE) last year was a suite of changes regarding how workers are defined and who employees are under the law. The government‘s stated objective is to tidy up the grey area between independent contractors and employees, commonly labelled ‘dependent contractors‘, by extending employee protections to a large swathe of contractors perceived to be at risk of exploitation. Several cases concerning the treatment of courier drivers and workers in the film industry shone the spotlight on this issue three or four years ago, and unions have been pushing it along ever since.

Unfortunately, what the government has proposed goes much further than what is necessary and could completely change contracting arrangements in the trucking industry by redefining the owner-driver/principal relationship to something much closer to a standard employment contract. This, the government argues, will provide contractors with added employment protections. Inevitably, it will also have unintended consequences, not only for those working in our industry but in much higher costs across the consumer market and New Zealand‘s export-driven economy. In the wake of Covid-19, the last thing we need is misdirected new labour law that seeks to reduce the costeffectiveness and efficiency of our freight system and make road transport less competitive in the modern labour market. The potential impact of the proposed changes would be massive. Information from Stats NZ shows that more than 3300 owner-driver units represent more than 65% of the country‘s transport service licence (TSL) road freight businesses.

Business New Zealand, which like the RTF submitted in opposition to the government, challenged the basic assumptions behind its proposals: “It [the discussion document] does not examine the extent to which either independent or dependent contractors are ‘vulnerable‘, focussing instead on options that would affect both categories across a spectrum that is largely commercial in reality. Thus, the options risk negatively affecting genuine commercial contracting across the economy in the name of protecting instances which are already arguably unlawful under current law.” This really gets to the heart of the issue. The government, determined to deal with perceived issues regarding the vulnerability of ‘dependent contractors‘, is under pressure from unions, which fundamentally oppose modern contracting arrangements. Therefore, instead of dealing with specific issues in some sectors, they are pursuing a one-size-fits-all solution that will impact the entire economy. As the RTF‘s submission makes clear, that directly threatens the operation of road transport businesses, which rely on the flexibility provided by contract drivers.

“Deregulation, enabling the growth of the independent contractor, has resulted in transport-cost benefits across the economy, fostering business growth for a lot of transport companies. This has occurred without the need to have unnecessary inventories of trucks and equipment, or having to find and pay drivers for downtime in what can be a very fickle and cyclic service market. The additional transport service to keep the transport chain fully functional in a cyclic market has been taken up by owner-driver contractors.” The RTF will continue to fight to protect present ownerdriver arrangements for the road transport sector. Most ownerdrivers want the lifestyle choices and the chance to ‘be their own boss‘ that contracting provides, while the flexibility that this model offers has also proved to be extremely effective for the demand-driven nature of New Zealand‘s domestic freight task.