Linfox outsources as Coles puts the squeeze on

Linfox forced to fire employee drivers and outsource Coles contract to subbies due to "squeezing client margins"

Linfox outsources as Coles puts the squeeze on
Linfox outsources as Coles contract puts the squeeze on
By Brad Gardner | August 5, 2011

Coles is putting the financial squeeze on Linfox under its contract with the carrier, prompting it to sack employee drivers and outsource work to sub-contractors.

That was the accusation levelled against the supermarket giant and Linfox during the Transport Workers Union’s (TWU) dramatic appearance before a Senate committee on the carbon tax last month.

In transcripts released from public hearings, TWU National Secretary Tony Sheldon tore into Coles over its transport contracts and held it and Woolworths "ultimately responsible" for heavy vehicle fatalities.

A representative for Linfox has declined to comment on the matter, but Sheldon told the committee Lindsay Fox is firing "a whole series of employees and outsourcing the work to other contractors" under Linfox's contract with Coles.

"What he has done, by his actions, is dealing with squeezing client margins," he told the committee.

"What happens is that he outsources the work because he is under pressure from the big end of town – clients like Coles – and he is substantially laying off people around the country right at this minute and putting other truck drivers’ work to other people."

While labelling Fox one of the best operators in the transport industry, Sheldon says outsourcing will become more prevalent once a carbon tax is applied to trucking unless safe rates are introduced.

He has likened the carbon tax, which will apply to heavy vehicles from July 1, 2014, as a "death tax" unless the Federal Government reforms remuneration to give truck drivers the ability to recoup their costs.

"Lindsay Fox employees will be affected this way when the carbon tax comes in: he will not be able to recoup costs from the industry and he will pass it on by outsourcing more of the work," Sheldon says.

When Labor Senator Doug Cameron asked if the tax would amount to a "death sentence" for some truck drivers, Sheldon responded: "Not for the diminishing number of people who will be employed by Lindsay Fox, but for the people who he outsources the work to it will be."

Sheldon used his appearance to accuse Coles of issuing contracts with a remuneration formula that does not effectively account for inflation.

"They are putting it into all their contracts, saying it is all they will pay in return for having business with Coles," he says.

Including Woolworths in his criticism, Sheldon claimed both supermarket chains do not ensure decent wages, conditions and safety throughout their supply chains.

Coles did not comment on its contract with Linfox, but in a response to ATN a spokesman for the company says: "We reject the TWU’s claims, which they make regularly and without any supporting evidence."

Sheldon’s claims drew empathy from Nationals Senator John ‘Wacka’ Williams, who says getting money out of Coles and Woolworths "is very difficult".

"We have seen what they have done to many farmers in this country as far as prices go," he says.

Sheldon, who recently took Workplace Relations Minister Chris Evans to task, says the government must legislate a safe rates scheme ahead of the carbon tax’s introduction.

The TWU heavyweight says the tax, which the union argues will cost drivers between $150 and $200 a week, will not be a problem if there is a mechanism for them to pass it on.

"But I know what the consequences of this tax will be without safe rates. We will see more truck drivers killed on our roads, more people in cars, innocent road users, being killed because of the pressure that happens in the trucking industry as we speak," he says.

Sheldon also used his appearance to accuse Evans of being incapable of understanding the need for safe rates despite numerous meetings with the TWU.

"We have seen people getting slaughtered on our roads – massive fatality increases – and nothing is being done to address it," he claimed.

When Cameron interjected and told Sheldon his criticisms of Evans were not helpful, the union boss retorted: "I’ve got a few other choice descriptions as well."

When contacted for comment, a spokesman for Linfox did not confirm or deny the union’s allegations but told ATN: "We do not comment on individual contracts and their commercial and operational details."

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