AUSTRALIA: Coles, Woolworths Face Wage Worries After Tribunal Ruling

Coles has been told by the Fair Work Commission to rework the terms of a deal with a trade union, a move that will also impact rival Woolworths Ltd.

In that ruling earlier this week, the FWC found that some of Coles’ 77,000 staff faced “significant” underpayment due to the deal between the retailer and trade union Shop, Distributive and Allied Employees Association.  The FWC said the deal may have cost low paid workers A$70m annually, particularly hurting part-time and casual workers, who make up 80% of Coles’ workforce.

Workplace agreements are meant to pass the “better off overall test”, which is intended to ensure workers are paid more under workplace agreements than the workplace award (basic wages).  The FWC decision found the Coles agreement failed this test, and has given the retailer 10 days to offer undertakings that it will either compensate employees left worse off or overhaul rosters. If it fails to do so, the agreement will be ripped up.

The ruling comes even as Woolworths is itself in negotiations with the same union, and the existing agreement between the two sides are the same as Coles.  Woolworths noted: “We are monitoring the Coles case, however, we are continuing to engage with bargaining representatives about a proposed new agreement”.

NAM Implications:
  • The key issue is the impact on shop-floor morale
  • …combined with the press coverage rub-off on shoppers…
  • Time for fast move to moves that will pass the “better off overall test” with an agreement that provides a bit more than the on-tin description…