Union proposals will cost us $300m, Coles claims

Retailer warns of massive increase in transport costs and risks to subcontracting if RSRT accepts TWU's and NUW's proposals

Union proposals will cost us $300m, Coles claims
Union proposals will cost us $300m, Coles claims
By Brad Gardner | April 30, 2013

Coles has baulked at union attempts to impose new obligations on retailers under the guise of road safety, claiming the proposals will drive up its transport costs by $300 million per year and undermine the use of subcontracting.

The retailer has written to the Road Safety Remuneration Tribunal (RSRT) to oppose submissions from the Transport Workers Union (TWU) and the National Union of Workers (NUW) that seek to reshape the commercial relationship between customers and transport operators.

The TWU wants orders requiring retailers to pay a training levy, wear costs usually borne by transport operators and take greater responsibility for enforcing compliance with road transport laws.

Its submissions, which cover the retail and long distance sectors, want employees paid for all work performed and for owner-drivers to be paid allowances and a rate that covers "reasonable business expenses" and provides a "reasonable profit margin".

The NUW, meanwhile, has focused on job security and labour hire. It wants drivers working for an operator providing services to a prime contractor such as Linfox or Toll to receive the same pay and conditions if they were directly employed by the larger firms.

Furthermore, it believes casual drivers working for a prime contractor or a subcontractor should be able to move to full-time or part-time work with the prime contractor if they wish.

Coles says its preliminary analysis suggests the TWU’s and the NUW’s proposals will increase its transport costs by $300 million, or 25 percent, annually.

"These increased costs will obviously have a direct impact on the overall operational efficiency of Coles’ supply chain and those of its competitors, and may ultimately flow through to supermarket consumers," it writes.

"The immediate impression one discerns from each draft order is a desire to effectively make subcontracting unviable and in turn imposing a shift to direct employment amongst intermediaries."

Coles, which has worn the brunt of the TWU’s attacks on the retail sector for its approach to transport operations, also questions if the union’s proposed training levy falls within the scope of the RSRT.

The TWU proposes retailers pay a levy determined by the RSRT. A group made up of employer and employee representative groups, contract drivers and the Fair Work Ombudsman will oversee how the revenue is spent.

Coles says the RSRT’s responsibilities are limited to orders canvassing remuneration and remuneration-related conditions.

"It is difficult to see how a levy administered by a tripartite body aimed generally at "awareness and education" deals with ‘remuneration and related conditions’," it says.

"If it is within the scope, Coles does not in any event consider the case for an additional training levy to be made out at this stage."

The submission questions if it is practical to impose obligations on Coles to ensure compliance across the supply chain where the retailer has no means of monitoring or enforcing compliance, such as with a business Coles has no direct commercial relationship with.

It raises a similar question regarding safe driving plans, which the TWU wants retailers to be liable for enforcing. It asks how it can enforce compliance if it has no means of monitoring drivers.

The Wesfarmers-owned business also used its submission to refute allegations its practices are leading to poor safety outcomes across the supply chain.

"Coles takes its chain of responsibility obligations very seriously. Coles is recognised as an industry leader in adopting and implementing chain of responsibility policies," it says.

General Manager of Transport and Integration Craig Wickham has also written to RSRT President Jennifer Acton inviting tribunal members to visit Coles’ distribution centres to gain an understanding of its transport operations.

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