Renewed call for making 30-day payment terms mandatory
TOO many contracts for road transport services contain unfair payment terms, according to the National Road Transport Association (NatRoad).
"NatRoad has seen an increasing tendency for payment period to extend to 90 days. But 30-day minimum payment terms are a must for the road transport industry, which is characterised by tight margins, and intense competition,” said Warren Clark, CEO of NatRoad.
"The road safety remuneration system that NatRoad fiercely opposed had one highly beneficial element: the mandating of 30-day minimum payment terms. Having this provision returned to the law would significantly improve the viability of small trucking businesses.”
WA Labor Senator Glenn Sterle, the shadow assistant minister for road safety, has already indicated to Big Rigs that the mandating of 30-day payment terms is high on his priority list, should Labor be elected in May.
"Our members have told us that lengthy payment terms are becoming more common. In particular, members should check their contracts so that provisions which permit the client to withhold payment of disputed invoices are not part of the agreement to provide transport services,” said Mr Clark.
"We have analysed contracts for members where a trap is set for not meeting timing or document submission deadlines.
"Penalties for not meeting KPIs under the guise of so-called liquidated damages should be resisted in contract terms, particularly where the time slot allocated for delivery is not reasonable. The better members define and adhere to payment terms and reject penalties for not meeting KPIs the more likely members are to be paid promptly and to avoid disputes.”
Mr Clark said NatRoad considers that a contractual term requiring payment beyond 30 days has all of the hallmarks of an unfair contract term.
"We have asked the Government to make provisions in small businesses contracts that require payment beyond that period unfair under the legislation.”
"In the context of an upcoming election, we are urging both political parties to stop the unfairness associated with payment terms and to help operators in the road transport industry make a decent living rather than being mere price-takers.”