Big industry players are concerned about the Road Safety Remuneration Tribunal (RSRT) plans to mandate minimum pay rates for owner-drivers.

The tribunal is looking at setting minimum hourly and kilometre rates for owner-drivers engaged in supermarket and long distance work.

If the plan goes ahead, the payments will be based on a driver’s classification, the type of work they perform, the equipment they provide, as well as payment for rest breaks, waiting and loading or unloading time.

But a leading express transporter – Border Express – believes the rates it pays to its owner-drivers would have to rise by as much as 30 per cent if the contractor remuneration changes are introduced.

The company says it uses 90 contractors and 13 owner-drivers for linehaul jobs, while another 70 owner-drivers are employed in local deliveries.

Border Express pays owner-drivers by trip, not by hours taken to do a job.

“If the order is made in the proposed form, the rates which are paid to our road transport drivers will need to be increased by 18 to 30 per cent,” Border Express managing director Grant Luff said in a submission to the RSRT.

Mr Luff says Border Express and other firms would have to make a range of administrative changes, and may no longer be able to use owner-drivers as a result.

“If an order is made in accordance with the terms of the draft order, Border Express would seriously consider reverting to a fleet only comprised of employed drivers,” Luff says.

“On current estimates, the proposed rate increase, administrative costs associated to managing the payments and the investment into software and telematics systems to administer the proposed changes would outweigh the recoverable costs from suppliers to continue to engage owner drivers.”

The RSRT is holding hearings this week on the proposal and industry submissions made so far.

It has hinted that the changes could be brought in by January 1, 2016, but Mr Luff says that timeline would not give Border Express enough time to go back over its rates and renegotiate with its customers to cover the costs.

“A significant amount of time is required to identify, integrate and implement a new software program for managing the proposed hourly and kilometre rates, a payroll system will be required to be sourced as a the current system allows for either an hourly payment or a trip payment,” he says.

The RSRT hearings are on in Melbourne later this week, and will discuss the rates proposal that the Transport Workers Union (TWU) says it supports, although it wants a higher hourly rate for owner-drivers.