Strict measures at heart of Linfox's RSRT proposal

Linfox wants strict conditions placed on trucking operators and owner-drivers before they can bid for work

Strict measures at heart of Linfox's RSRT proposal
Strict measures at heart of Linfox proposal
By Brad Gardner | May 17, 2013

Trucking firms and owner-drivers should meet strict new conditions before being allowed to offer their services, claims Linfox, which also wants cutthroat tendering practices stamped out.

Weighing into the debate on the direction the Road Safety Remuneration Tribunal (RSRT) should go in, Australia’s most recognised transport and logistics operator has put forward a proposed road safety remuneration order covering the retail and long-distance sectors.

Linfox wants an RSRT decree stopping customers from entering into contracts with a transporter unless it, its employees and subcontracted drivers have passed police record and traffic history checks.

Under Linfox’s plan, operators will be prevented from securing work if they or their drivers have committed a speeding breach, received a Safe-T-Cam notice, contravened loading restraint laws and recorded a positive drug or alcohol test in the previous six months.

Businesses must also provide the results of driver health checks occurring within the last six months and demonstrate evidence of completing accreditation programs on fatigue management, day and night driving, workplace health and safety, drugs and alcohol, diet, and traffic laws within the last two years.

"This clause aims to ensure that the road transport industry attracts quality drivers who are less likely to engage in unsafe driving practices," Linfox President of Human Resources Laurie D’Apice has written to the RSRT.

Single truck operators will need to undergo a recognised course in financial management and basic accounting before being allowed to bid for work.

D’Apice says the proposal aims to promote the financial stability of owner-drivers.

"Under current road transport legislation, any person holding a truck drivers licence with access to a registered truck can supply road transport services at rates determined by the market," he says.

"This can lead to high levels of unsustainable debt and force contractor drivers to work in an unsafe manner in order to service these debts and maximise the return on their investments."

Linfox is also seeking the power to audit the books of its subcontractors to make sure they are complying with relevant legislation, maintaining their vehicles and equipment to standard and ensuring their drivers abide by the law.

D’Apice claims the practice will create an incentive for contractors to act safely and monitor their drivers. Linfox proposes giving subcontractors 14 days to rectify a breach or risk having their contract terminated.

Furthermore, subcontractors will need to take out and keep a range of insurance policies, including public liability not less than $10 million, minimum comprehensive vehicle insurance of $30 million and non-owned trailer and non-owned container insurance of at least $250,000.

Linfox adds that subcontractors should also take out any other insurance a prime contractor requires.

Linfox’s proposals, which follow those lodged by Coles and the Transport Workers Union, seek to end tendering practices that reward operators offering to work at the cheapest rate.

Linfox says customers should not grant a tender to a bidder if they believe the price offered is not enough to allow the transporter to do the work legally and safely.

"The intention of this clause is to prevent suppliers of road transport services being exploited by the competitive nature of the road transport industry," D’Apice says.

Linfox’s proposal states customers will need to take into account the costs contractors need to deal with and make provisions for those costs when determining rates.

Customers will also be responsible for footing the bill for time spent loading and unloading trucks. Linfox proposes prime contractors pay subcontractors and then chase the customer for reimbursement.

"Linfox submits that a customer should not remain in a position where it enjoys the benefits of road transport services at a price that doesn’t fairly reflect the costs incurred in providing such services," D’Apice says.

"Linfox acknowledges that one of the key concerns for contractors is the time and money lost to the loading and unloading of trucks and demurrage."

A similar practice will apply if a subcontractor’s rates need to increase during the life of a contract. Linfox’s proposed road safety remuneration order wants a mechanism to review rates every 12 months.

"The clause also allows for these costs to then be recovered from the customer of the prime contractor to prevent the prime contractor from solely incurring the financial burden of increased rates," D’Apice says.

The proposed order says rates paid to subcontractors should include, but not be limited to, covering vehicle or equipment registration and running costs, administration and insurance costs, depreciation, engaging additional relief labour and the cost of complying with relevant laws.

If the RSRT accepts Linfox’s proposal, subcontractors will be placed on 14-day payment terms for undisputed funds. Any disputed funds will be paid as soon as practicable once the dispute is resolved.

"This provision is made to improve the cash flow of contractors in the road transport industry and help ease financial pressures," D’Apice says.

However, Linfox wants the power to withhold payment to a subcontractor if it believes it is not paying its drivers the correct rates.

D’Apice adds that businesses should also be free to offer incentive payments to employed drivers and contractors as long as they do not encourage unsafe driving practices.

"Linfox submits that the mere fact that payment terms contain driver incentives does not automatically create circumstances where a driver will be in induced to drive in an unsafe manner," he says.

The proposal also touches on the need for all parties in the supply chain to be actively involved in monitoring safe driving plans and reporting drivers who commit unsafe behaviour or do not abide by relevant laws.

Linfox has opposed provisions in the TWU's proposed order, claiming the union should not be given the power to audit the records of parties to a contract.

"It is not the role or right of an industrial organisation to act as the pseudo enforcement body when contractual measures are in place for the parties to a Contract for Services to ensure their own compliance with relevant laws," D’Apice says.

Linfox has also sought conditions on agents sourcing subcontractors for short-term work on behalf of prime contractors.

D’Apice claims the prime contractor is often unaware of the contractual or financial relationship between the agent and the subcontractor or the steps the agent takes to ensure the business is not prone to foregoing safety to make extra money.

"Linfox submits that this arrangement contributes to unsafe work practices and can add to financial pressures felt by road transport drivers through additional agent expenses," he says.

As such, Linfox wants the RSRT to require agents to ensure subcontractors recommended for work are safe, responsible and properly remunerated.

The RSRT this week finished receiving submissions on proposed road safety remuneration orders. The original deadline was set at April 22, but President Jennifer Acton extended it to May 13 following industry requests for extra time.

Road safety remuneration orders can set minimum remuneration and related conditions covering truck drivers of an individual company or throughout the supply chain.

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