CMPA News - Issue 31, February 2007

News - Issue 31, February 2007

Feature Articles

· New Rights for Owner Drivers

How the Owner Drivers and Forestry Contractors Act will affect you

· How do you know when to buy a new Loader?

Raymond Walsh, in conjunction with William Adams

· Loading Tool Production Calculation

Bob Jones, Komatsu Australia

General Articles

· Conveyor Belt Workshop

Kinder & Co presents the CMPA’s first Workshop for 2007

· General Meeting 20

First CMPA General Meeting in 12 – 18 Months!

Regular Items

· What’s News?

· Business

· Transport

· Education

· Submissions and Issues

· Legislation/Standards

· DPI Update

New Rights for Owner Drivers

How the Owner Drivers and Forestry Contractors Act will affect you

What is the purpose of the Act?

The Owner Drivers and Forestry Contractors Act 2005 aims to improve the position of small businesses in the transport and forestry industries by providing them with the information and support essential to run a successful business. The Act also provides a framework for resolving disputes in a timely and cost effective manner. The main parts of the Act commenced on 1 December 2006.

Who does the Act apply to?

The Act applies to owner driver businesses (including sole traders, companies or partnerships) that operate up to a maximum of three vehicles in providing services in transporting goods. The Act only applies where the owner of the business also drives one of the vehicles.

The Act covers owner drivers involved in interstate operations where a substantial part of the services are performed within Victoria.

The requirement to provide contractors with an Information Booklet and the applicable rates and costs schedule only apply to contractors whose engagements are ongoing, or where services are performed for more than 30 days in any three month period. The requirement to give a minimum period of notice only applies where the engagement proceeds beyond three months.

What is the Code of Practice?

The Owner Drivers and Forestry Contractors Code of Practice came into effect on 1 December 2006. The Code contains some mandatory requirements and also sets out guidance on industry best practice. In addition, the Code can be taken into account by the Victorian Civil and Administrative Tribunal (VCAT) in determining whether unconscionable conduct has occurred, or whether contract terms are unjust.

How does the Act ensure contractors are well informed?

The Act sets out a number of requirements that will assist contractors to improve their business skills and to better understand their cost structures and their contracts.

The Information Booklet

The Information Booklets are designed to provide a comprehensive and convenient source of information to owner drivers and forestry contractors to assist them to run their businesses safely and profitably.

The Information Booklet provides information on:

· Rights and responsibilities under the Act and Code;

· Information on establishing and running a small business;

· Sources of advice and assistance; and

· Regulation of the industry and health and safety

Rates and Costs Schedules

The Rates and Costs Schedules give contractors information on:

· The typical running costs of the business

This information is based on the kind of vehicle or equipment provided under the contract. An example is provided based on a typical business using that type of vehicle, with an explanation of how the costs might vary for an individual business. The model can be used by the contractor to calculate their own individual operating costs.

· The rates typically paid to employees performing similar work

This will assist the contractor to decide a reasonable rate for their own labour.

The Schedules do not set minimum rates that must be paid.

Instead they provide contractors and hirers with information about the typical operating costs applying to their business. Having this information before entering a contract will assist contractors to assess whether they should accept the rates being offered and allow better information negotiations.

It is a requirement of the Act that from 1 December 2006 the Information Booklet and the applicable Rates and Costs Schedule be given by hirers to all new contractors three days before they sign a contract. The requirement also applies to tender processes and to freight brokers.

Transitional provisions in Part 10 of the Act mean that hirers must provide all current contractors who are engaged as at 1 December 2006 with a copy of the Information Booklet and the applicable rates and costs schedule.

Contracts must be in writing, and specify minimum hours or income

The Act requires that all on-going engagements must be in writing, and the contract must specify minimum level of income or number of hours of work. The minimum could be zero but on the basis that the parties understand the offer being made, they can seek to negotiate the level of security and certainty they require.

The Transport Industry Council has prepared a generic non-industry-specific model contract to assist both hirers and contractors to develop written contracts.

If the hirer breaches the Act by not giving either the Information Booklet or the Rates and Costs Schedules to the contractor as required by the Act, then the contractor can make a claim to be paid for their labour and profit at an appropriate and fair rate, as determine by VCAT.

Information extracted from Industrial Relations Victoria documentation. www.irv.vic.gov.au

CMPA RESPONSE TO THE OWNER DRIVERS AND FORESTRY CONTRACTORS ACT

Over the last two years, the CMPA has been working with the State government to establish how industry will be affected by the Owner Drivers & Forestry Contractors Act, and what you will need to do to be compliant.

Recent CMPA Forum

The CMPA held a forum on Wednesday 14 February to provide Members with a clear understanding of what the Owner Drivers & Forestry Contractors Act entails and how to manage its implementation.

The forum included the release of a standard form contract required under the Act as developed by the CMPA specifically for industry.

A full report from the forum will be published next issue.

The CMPA Contract

The “Conditions of Contract for Hiring Cartage Contractors to Transport Quarry Materials” is a contract developed for Members in response to obligations under the Owner Drivers & Forestry Contractors Act.

The contract enables members to easily implement an agreement between the hirers (i.e. quarry) and owner drivers (i.e. cartage contractor).

Electronic editions of the contract (designed to allow quick completion) are available to Members at a cost of $200 for non-members, and only $90 for CMPA Members. This document cost the CMPA almost $20,000 to produce.

How do you know when to buy a new Loader?

We look at what is new in technology, manufacturers tend to update models every 5 years or so, for this reason we like to wait for the latest model and features to be released which requires the heads up from suppliers who usually know well in advance of a new model release. If we are going out to buy something new we like to get the advantages of the latest technology and efficiencies. Walsh Ballarat Quarries tend to buy one new machine at a time and cycle older machines into secondary or backup roles like most quarries. This usually means that we dispose of the oldest loader from our fleet when the new one arrives.

The five year buying cycle generally equates to around 10,000 or 12,000 hours of operation between updating our loaders which is a good time to look at new models and rebuild the older machine for a second life. Technology can change a lot in five years so to be operating 15 and 20 year old machines in your front line customer sales areas is not good for business, the service you provide, image perceived by customers and the operations efficiency and safety are improved when you run the latest machines.

Speed and visibility are important with a sales loader as they are travelling around multiple stockpiles loading sales. We also look at the ideal pass match for truck loading and capability to blend and perform load and carry work.

Truck and trailer body size combinations have increased over the years so we need to consider the long term when we buy a loader that may be in our fleet for 10-15 years. It does require a little crystal ball gazing but we need to consider what future requirements might be.

Regulations on safety and emissions are also important considerations. These days safety considerations such as visibility, noise levels, operator comfort and access are an important part of the selection process.

There is a need to be environmentally conscious and active which can include everything from planning your quarry so that it is visually aesthetic to buying equipment that meets the latest or even future standards. Diesel engine emissions are here to stay and with the introduction of Tier 3 a whole new range of engines and technology are required to comply.

We generally rent our new machines for six months with an offer to buy an ex rental unit, it allows us to try the new machine over an extended period before we buy. While we like to demo new models on our sites, a day or a few hours to demo a machine is often not enough to get a full understanding of how the machine will perform and what we are buying so renting first gives us peace of mind that the machine will do the job and gain some confidence in its performance and reliability. This is also a good financial option as the rent can be fully expensed to the business and the amount to finance is reduced.

Skills required for maintaining and repairing equipment have to be kept up to date and this is sometimes difficult when it is not our core business. More and more businesses are becoming reliant on suppliers to provide the expertise of qualified people.

The fact that we may be liable if things go wrong through the use of non-suitably trained people has changed the way we look at doing things.

We can’t be the experts on everything these days and have the qualifications kept up to date so we have to rely on qualified contractor trades people to do the job. Which at the end of the day is usually more efficient and reduces your risk.

Our new Caterpillar 972H sales loader at Dunnstown is serviced for 4,800 hours by William Adams as part of the 3748 support agreement and we can generally get this done when it suits us as the service trucks operate seven days per week. This agreement also has 48 hour downtime backup support, total machine warranty to 6000 hours if you continue the services beyond the 4800 hours and guaranteed response times. It enables Walsh Ballarat Quarries to have a clear owning and operating cost up front which gives us peace of mind.

Raymond Walsh, Walsh Ballarat Quarries

Loading Tool Production Calculation

A commonly asked question of earthmoving equipment suppliers is: How much can I move with a wheel loader or excavator?

A good question and one that needs a better response than the maximum theoretical production possible in perfect conditions.

A number of earthmoving equipment suppliers have both simple and detailed programmes available for determining production capabilities but there are many variables that need to be factored in to come to what we could term “Practical Production Capability”.

Factors such as weather conditions, operator skills, equipment condition, ground conditions, fragmentation, bucket configuration, bucket size in relation to truck capacity, tight site operating conditions, available hours versus actual site hours, crusher capacity, etc. etc. all have an influence on the actual production capability. For instance, a loader or excavator may be able to produce at one rate simply side casting or load and carry, but at a significantly lower rate if required to load out trucks.

Often it is possible to get a good feel for actual production capabilities of a different piece of equipment by doing some site measurements and applying the same constraint factors to the new equipment. However, it is like the computer reports: Junk in = Junk Out.

Consult your earthmoving supplier for more details of support services that assist you – the end user – in getting the best solution for the task. In the end neither the end user nor supplier is a winner with a product supplied but not well suited to the task. Some simple methods of calculating production are shown below but must be adjusted to take into account the above factors.

Bob Jones, Komatsu Australia