TWU seeks Wettenhalls contract records

Receiver backs Coles in rejecting union claims over Express arm's failure as Sheldon looks for clues

TWU seeks Wettenhalls contract records
TWU seeks Wettenhalls contract records
By Rob McKay | February 5, 2013

The Transport Workers Union (TWU) aims to search records of the collapsed Wettenhalls Group for evidence of misbehaviour by Coles, even as both the retailer and receivers Ferrier Hodgson say there was no link.

In letters dated last Friday from TWU National Secretary Tony Sheldon, the union sought details of contracts, particularly involving the now defunct Express arm.

These were sent to Wettenhalls co-receiver and Ferrier Hodgson Partner George Georges and the administrator, Luke Targett,
of accountancy BDO.

The letters state that proxy forms will be completed for the TWU to represent its members in negotiations over the fate of the group.

"The TWU has received many inquiries from members seeking an explanation as to why the Group has fallen into receivership," Sheldon writes.

"We have had a number of theories proffered regarding the company’s difficulties, some of which are of serious concern to us."

The union says it wants details on four factors:

  • Long distance operations running at a significant loss
  • Major retail contracts struck at rates significantly below the market rates
  • Minor retail contracts struck at barely sustainable levels
  • Contracts containing penalties impacting on the group’s cashflow.

It remains unclear what pressure the union can bring to bear to gain the information should the administrators or receivers refuse to part with it.

Speaking to ATN, Sheldon put the Wettenhalls failure at the feet of Coles mostly.

Saying that management had been "competent and efficient" and that there was more information "to come for us to investigate", Sheldon continued: "Our best assessment is that the company and its long-distance business were essentially screwed by Coles, in particular and other major retailers on both price and payments."

He claims Coles took advantage of the weakness of Wettenhalls in the face of tough market conditions to drive rates to 20 percent below market levels and that it "in particular" withheld payments as a penalty when tight pick-up and delivery windows were not met.

Asked why Coles was so much more a TWU target than Woolworths, Sheldon says that though he would not like to hold Woolworths up as "a guiding light", it had been more cooperative in relation to the Road Safety Remuneration Tribunal and more progressive on transport issues.

As reported earlier, Coles returned fire saying the union was engaging in false accusations "yet again" and that the firm had not been used even as a subcontractor for Coles goods.

In this, it was backed by the receivers.

"Coles is not a Wettenhalls customer," co-receiver and Ferrier Hodgson Partner Brendan Richards says.

Accusations made during the TWU’s campaign against Coles and other retailers in relation to troubles besetting trucking firms have been rejected before by those in charge of the firm itself.

When the union sought to link Lennons Transport with alleged customer pressure, owner Tony Lennon said: "It is untrue that major supermarket chains made unrealistic demands on Lennons deadlines. Our freight is general freight for one-off or small jobs and as we do not transport perishable items for supermarkets, our deadlines are not as critical."

Sheldon tells ATN that a there was a possibility of a management buyout of what is left of the group now linehaul had been closed and the Warrnambool operation sold to Westvic Container Export Services but a Ferrier Hodgson spokesman would say only that "a range of offers was being considered and hopefully we will have further clarity on those [this week]".

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