Linfox stung by contract dispute

Linfox loses bid to force sub-contractor to pay $16,500 to upgrade his heavy vehicle

Linfox stung by contract dispute
Linfox stung by contract dispute
By Brad Gardner

Transport and logistics heavyweight Linfox has lost its bid to force a sub-contractor to pay more than $16,000 to upgrade his truck.

The NSW Industrial Relations Commission ruled that Linfox subsidiary Bevchain was wrong in trying to force Adam John to spend $16,500 fitting a hydraulically operated tailgate to his rig.

The commission heard that John paid for the equipment after being told by Bevchain he was contractually obliged to do so or have his services terminated.

Under the cartage contract between the company and sub-contractors, Bevchain can require vehicles to be upgraded if additional equipment is needed to deliver goods.

But Commissioner Peter Connor ruled the company's actions went against a clause in the agreement, which also states: "Linfox will pay or procure to be paid to the contractor the cost of that upgrade work, including installation and equipment."

"In the circumstances, I believe that Bevchain has an obligation…to recompense Mr John for the installation of the tailgate to his vehicle that it required him to provide," Connor says.

"I direct the parties into further discussions concerning this matter in the light of those observations."

John was represented by the Transport Workers Union (TWU), which originally lodged the dispute in October 2007.

Greg Selig from the TWU alleged Linfox’s actions breached the contract agreement, while Laurie D’Apice argued the carrier had no case to answer.

The commission was told John’s original vehicle was written off in an accident, but his replacement was not fitted with a tailgate.

D’Apice argued John’s insurance should have covered the $16,500 cost and urged Connor to dismiss the TWU’s claim.

The Linfox representative also told Connor the wording of the contract was taken out of context.

D’Apice says the clause requiring Linfox to pay for any vehicle upgrades was intended as a "one-off" arrangement to help drivers transferring from Linfox to Bevchain.

Linfox created Bevchain in late 2006 and John was part of a group of seven drivers transferred to the new subsidiary.

Furthermore, D’Apice argued it "made no commercial sense" for Linfox to pay for vehicle upgrades when the equipment would remain with the sub-contractor after they had left the company.

Connor, however, dismissed Linfox’s submission and told D’Apice the wording of the contract clearly showed the carrier was responsible for reimbursing John.

The commission heard that Bevchain told John he had 14 days to fit the new tailgate or lose his contract with the company.

"To avoid losing work, Mr John has upgraded his vehicle," Connor says.

The matter was originally due to be settled on December 10 last year during a conciliation meeting but Connor says neither party reached an agreement.

The dispute was sent to arbitration on March 30 this year but was repeatedly adjourned before being heard on July 16.

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