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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



Safeguard Magazine

It’s academic—Power out of balance

What happens when a principal and a contractor sign a contract which encourages the contractor into unhealthy practices? CLARE TEDESTEDT GEORGE reports on the plight of contract truck drivers.

In New Zealand in 2013, one out of every 20,000 car licence holders died in a road traffic accident. For truck drivers the death rate was six times higher.

Truck drivers work very long hours, often travel long distances and juggle multiple tasks, all of which are contributing factors to the high death toll but which largely go unreported. The causes of crashes are often treated as simplistic; the focus is almost entirely on the truck driver, with little attention paid to their working conditions and the health and safety policies of their employer or principal.

Prevention techniques have traditionally focused on the driver or the road or the truck, and while these have helped to reduce accidents to some extent, they do not go far enough.

The increasing push for more flexible labour practices has resulted in working arrangements which promote outsourcing, contracting and sub-contracting. What New Zealand and overseas research highlights is a growing trend of companies outsourcing not only their distribution and logistics, but also their health and safety responsibilities (eg Rawling & Kaine, 2012). Many companies have downsized to their core competencies and now outsource most other functions, creating complex chains of contractors and subcontractors. In the transport sector there has been a wholesale conversion from “employee” to “contractor”.

Studies (eg Quinlan & Wright, 2008) have highlighted disturbing practices, including the signing of contracts for owner-drivers that effectively require them to breach traffic laws, to work excessive hours, and to set work schedules that encourage travelling at excess speeds.

About 70 percent of the long-haul workforce are self-employed, owner-drivers, or on short-term contracts. For a select few, life as a contractor provides a variety of commercial work and significant premiums. However, many drivers trying to earn a decent living from insecure work are obliged to make employment and lifestyle choices which affect their health and safety.

Recent court cases have revealed that many contracts allow the principal unilateral power to make changes to the driver’s contract, including the terms of payment. Contract terms are often non-negotiable and the rights of the contractor to review or challenge are limited. Exclusivity clauses are common, which means the driver can only work for the one company. Contractors are required to invest heavily in capital items such as their truck. Some are required to procure key business costs from the principal’s key suppliers, ensuring dependency – the term “dependent contractor” has since emerged.

A contract that may seem objective and fair at the outset can quickly become a one-sided trap for the contractor in cases where the principal has almost total control of the relationship and unilateral powers to change it. With debt obligations and personal commitments to financiers, the dependent contractor cannot escape without loss. Termination rights invariably favour the principal; any attempts made by the driver to complain may result in the termination of their contract and their run taken by a more compliant driver.

The only solution for the contractor is to continue working even if they have to drive longer and longer hours to make ends meet. With no wage protection, this can mean working at below the minimum wage. The precarious nature of their contract also means they could lose their (one) source of income in an instant; meeting that deadline now has wider consequences: there is no time for a toilet stop, no time to have a proper meal, no time to sleep well.

Under such circumstances concerns for health and for safety come second to doing what it takes to meet deadlines. Drivers cannot raise these things, for fear that they will be blamed for this, and the contract terminated because they have broken the law. This puts drivers under immense pressure to work within the confines of the contract while trying to make a living.

More recently, a growing number of contract drivers have begun to seek legal redress against harsh and unreasonable contracts imposed by their principal companies, and have won. Since 2011, for example, the drivers’ advocate organisation ProDrive, together with Simpson Grierson lawyers, have successfully concluded 13 cases where misuse of unilateral power was the core issue. In each of these cases ProDrive confirms that adverse health and safety outcomes were a direct corollary to that power imbalance.

In his judgment, which found in favour of the contract driver, Justice Keane acknowledged this power imbalance between the contractors and the principal. In his ruling, he emphatically stated that: “as a result of the ruling that I gave in [the contractors’] favour Goodman Fielder will no longer be able to exercise its unilateral power in the manner that it did” (Keane J declaratory ruling 23).

In spite of the fact that the courts have found in favour of the contract drivers, wider law reform is still needed. What is also needed is a more comprehensive safety and health approach to the reduction of road accidents. Unless these things occur, the already horrendous road toll will continue to rise.

Clare Tedestedt George is currently undertaking a PhD at AUT focusing on the health, safety and wellbeing of contracted truck drivers in New Zealand. If you have information to share please email her: clare.george@aut.ac.nz

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