Woolworths’ strike-busting bid to end $50m warehouse stand-off that’s cleared shelves

Woolworths has filed an urgent application with the Fair Work Commission to stop union members from blocking access to its distribution centres, as it claims the industrial action has cost the business $50 million so far.

Woolworths has blamed the strikes for empty shelves and stock shortages among staple items such as toilet paper, cereal, frozen goods, meat and dairy.

Dozens of union members outside the Woolworths distribution centre on Tuesday. Numbers were fewer than on Monday.Credit: Wayne Taylor

While Victorians are bearing the brunt, stores in NSW and the ACT are also affected.

The stand-off has also led to alcohol shortages at some Dan Murphy’s and BWS stores in Victoria and southern NSW. Drinks giant Endeavour Group said it was working to replenish products. Endeavour Group is a customer of Primary Connect, Woolworths’ supply chain solutions provider.

A United Workers Union (UWU) picket line outside a critical distribution centre in Dandenong South, in Melbourne’s south-east, entered its 13th day on Tuesday after the supermarket giant failed in its attempt to bus in workers and reopen the centre on Monday.

Woolworths said many of the centre’s workers were ready to return to work and break the strike, which began at four of its distribution centres on November 21, when more than 1500 workers walked out to fight for better pay and conditions.

Woolworths said the union was seeking pay increases at the warehouses of more than 25 per cent over three years, which was well above inflation, and that its current offer would push hourly rates to about 40 per cent above the award.

UWU national secretary Tim Kennedy, speaking from the Dandenong South site, rejected Woolworths’ allegation the union was not bargaining in good faith.

United Workers Union national secretary Tim Kennedy, pictured in 2021.Credit: Eamon Gallagher

Woolworths applied to Fair Work on Tuesday morning. The supermarket said: “This application to Fair Work alleges a breach of the good faith bargaining requirements in the Fair Work Act.

“The application comes after the UWU refused to give any assurance of safe passage for team members seeking to return to work at our Melbourne South regional distribution centre yesterday and this morning.”

About 85 per cent of workers at the distribution centre were members of the union, Kennedy said, which was contrary to Woolworths’ claim that the majority of workers there were not members.

Kennedy dodged questions about how union members would respond if workers arrived at the site and it reopened.

“If Woolworths bring down a handful of workers who want to go in there, it does not solve this problem. It will not make this shed work. It will not fill the shelves,” Kennedy said.

“What will do that is if Woolworths sit down and talk to the union reps today and close off this agreement on fair terms.”

At the heart of the industrial 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 union is pushing for the immediate removal of the framework, which was introduced earlier this year.

Business Council of Australia chief executive Bran Black urged the union to drop its demand.

Business Council of Australia boss Bran Black.Credit: Oscar Colman

“You have to have productivity on the table in the context of any wage discussion. And the information that we have is that the union is steadfastly refusing to allow productivity to even be part of the discussion,” Black told ABC RN Breakfast on Tuesday.

Woolworths said on Tuesday that the union’s push to drop the framework would preclude the supermarket’s ability to manage productivity.

“The use of labour standards to manage productivity is common practice in supply chains globally and in Australia,” Woolworths said in a statement.

Members gathered for a meeting outside the distribution centre after 11am, where they learnt about the Fair Work application. They clapped and resolved to remain steadfast. The picket line now has marquees and portable toilets outside the distribution centre.

In a separate ASX market update issued on Tuesday morning, Woolworths said the industrial action had so far cost the business $50 million in lost sales.

“Until the industrial action is resolved, a further impact to sales is expected. The full financial impact at this stage is unknown.”

United Workers Union members outside the Dandenong South distribution centre on Tuesday.Credit: Wayne Taylor

The Dandenong South site accounts for more than 40 per cent of the four shuttered distribution centres’ total output, Woolworths has said.

Financial analysts say the industrial dispute poses a risk to Woolworths’ sales performance for the crucial Christmas period. The supermarket chain made $13.6 billion in Australian food sales in the 14 weeks between July and early October, or about $971.1 million a week.

Phillip Kimber, a retail analyst from advisory firm E&P, estimated the strike would slice 0.3 per cent from Woolworths’ 2025 financial year profits.

“[It’s] largely immaterial at this stage, but if it drags on, then the impact could be larger,” he said.

Woolworths’ Southbank store on Tuesday. Financial analysts say the industrial dispute will hurt the company’s bottom line.

MST Marquee senior analyst Craig Woolford said every decimal point of sales was important.

“Any dent could impact profitability,” he said. “A retailer like Woolworths wants to have a great Christmas, and they’re going to be impacted by sales coming into Christmas.”

Premier Jacinta Allan said the industrial action was a matter for Woolworths and its workers.

“But I think we all would hope there is a speedy resolution to this,” Allan said. “I think we can all understand the view of workers with changes to workplaces that they would have some anxiety. So I do hope that this can be resolved as quickly as possible.”

Meanwhile, the Shop, Distributive and Allied Employees’ Association will apply on Wednesday in the Fair Work Commission for its members to be able to return to work and for its recent agreement with Woolworths to be voted on by all employees.

SDA members have not worked or been paid during the UWU dispute.

With Hannah Hammoud, Jessica Yun

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