What’s behind the empty shelves at Woolworths?

Shoppers are facing empty shelves ahead of the busiest shopping period of the year, as strike action across Woolworths’ distribution centres forces nationwide shortages.

What is the strike about?

Nearly two weeks have passed since 1500 Woolworths warehouse workers walked off the job at four distribution centres in Victoria and NSW. The strike is a response to Woolworths’ refusal to improve the terms of their workplace agreement. Workers are demanding a better offer on safety, pay and equity from the supermarket giant.

Protesters formed a picket line outside the Woolworths distribution centre in Dandenong South on Monday. Credit: Luis Enrique Ascui

The union is asking for an immediate pay increase of more than 25 per cent and wage rises of 15 per cent in years two and three of the agreement, according to Woolworths. However, at the heart of the dispute is the company’s new performance management system, the “Coaching and Productivity Framework”, which workers say places unreasonable pressure on them to meet productivity targets while compromising their safety.

The United Workers Union, which represents the striking workers, has called for the immediate removal of this framework, which was introduced earlier this year. Under the new system, warehouse employees are required to meet a strict picking rate – targeting the number of items picked per hour – along with other performance metrics. Staff claim failure to meet these targets could lead to disciplinary action.

In June this year, the union made a submission to the federal government’s inquiry into the digital transformation of workplaces where it detailed Woolworths’ “intense monitoring” of ‘gap times’ such as toilet breaks. The submission described “gap times” as any time during a shift that a worker is not actively on task.

UWU national secretary Tim Kennedy said: “Members of United Workers Union are very clear that while Woolworths’ punitive productivity ‘framework’ is still in play, safety is not being taken seriously by one of the country’s largest private sector employers in one of the most dangerous industries for workers.”

“We have raised it in meetings, and we have raised it on the shop floor: treating workers like robots is unacceptable, and addressing the framework is the first priority of our members.”

What does it mean for shoppers?

As the strike continues, Woolworths customers are already feeling the pinch. The shortages are most notable in staple items such as toilet paper, cereal, frozen goods, meat and dairy.

The lead-up to Christmas is a critical period for supermarkets. November and December typically account for 22 per cent of their annual sales, according to recent research by MST Marquee.

Shortages have been reported at Woolworths stores in Victoria, NSW and the ACT.Credit: April Lombardo

A Woolworths spokesperson said negotiations with the union were continuing in a bid to rectify store shortages. “We sincerely apologise for the inconvenience and would like to thank our customers for their understanding and for treating our teams with respect,” the spokesperson said.

In an effort to ease the crisis, Woolworths announced the reopening of its Melbourne South Regional Distribution Centre in Dandenong South on Monday. But after hundreds of protesters formed a picket line blocking entrances to the centre, it is unclear whether any staff returned to work.

The company said Dandenong South was the most significant site currently subject to indefinite industrial action across four distribution centres and that resuming operations would improve the availability of food and essential grocery items in Victoria.

Woolworths said that after contacting almost three-quarters of the team at the site, the majority indicated they wanted to return to work and be paid in the lead-up to Christmas.

Alcohol supply has also been disrupted in Victoria due to strike action at the Woolworths site in Laverton, which delivers to BWS and Dan Murphy’s outlets. It is also the direct supplier to one of Australia’s largest pub operators, ALH Group.

In a statement issued on Monday, Woolworths said there was “no need” for the disruption at the Dandenong South site. “As long as they continue to block access to our site, our customers will continue to face shortages on shelves in Victoria,” a Woolworths spokesperson said.

However, Kennedy said Woolworths shelves could be replenished “very quickly” if the supermarket giant addressed staff concerns.

”Woolworths can fix this by simply sitting down and listening to what the workers’ legitimate concerns are and meeting them,” he said.

Why is the dispute affecting Victoria more than NSW?

While workers in NSW are striking at one distribution centre in Erskine Park, the three Victorian sites – Dandenong South, Laverton, and Barnawartha – are bearing the brunt of the industrial action.

Security guards outside the Woolworths Melbourne South Regional Distribution Centre on Monday. Credit: Luis Enrique Ascui

What does it mean for Woolworths?

The strike and the supply issues come at a tough time for Woolworths’ image. The company is also embroiled in a legal battle with the Australian Competition and Consumer Commission over discount practices that are allegedly misleading. Woolworths and Coles are also facing class action lawsuits over alleged deceptive pricing.

With the holiday season approaching, Woolworths is under intense pressure to resolve these issues quickly. Woolworths on Monday said the Shop, Distributive and Allied Employees’ Association had endorsed the company’s offer presented last week.

The supermarket said that despite the endorsement, the UWU is pushing for an offer that is “materially above inflation, at a time when Woolworths is actively working to keep food and groceries affordable for our customers who are facing ongoing cost of living pressures”.

Kennedy said Woolworths had the capacity to offer affordable prices to shoppers, as well as fair wages to workers all while continuing to make a profit.

”This is a super profitable company. It’s a matter of whether Woolworths want to rebuild their trust with the Australian public as both shoppers and as workers,” he said.

Kennedy said negotiations between the union and the supermarket giant were under way, with the aim of reaching an agreement as quickly as possible.

For now, the strain on supply chains is likely to continue, as Woolworths works to get its operations back on track before the holiday rush hits with full force.

With Cassandra Morgan

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