Coles and Woolies unite to scrap penalty rates under new proposal

The supermarket giants have been criticised after joining forces with other retailers to push for a change in minimum conditions for retail workers.

Penalty rates will be scrapped for some retail workers and rest time between shifts will be cut under a new proposal being pushed by Coles, Woolworths and other major retailers. 

The supermarket giants, along with retailers including Kmart and Costco, have joined forces to back the Australian Retailers Association’s (ARA) application in the Fair Work Commission to vary the general retail industry award.

Under the proposal, salaried managers would have their overtime, evening and weekend penalty rates, and annual leave loading cut in exchange for earning 25 per cent more than the award minimum or about $67,000.

Rest times between shifts on different days will also be slashed from 12 down to 10 hours, and restrictions on working one shift a day would be abolished, as per the Australian Financial Review.

Employees could also waive meal breaks for six-hour shifts.

Coles is among other retailers who have publicly backed the proposal. Picture: NCA NewsWire / Dan Peled

ARA chief industry affairs officer, Fleur Brown, said the association lodged the application last year following a review initiated by the federal government, to make the General Retail Industry Award 2020 “clearer, simpler and more flexible for all parties”.

“The ARA recognises that the current award, with 994 individual pay rates spanning 96 pages, is unnecessarily complex and misaligned with the evolving needs of the retail workforce. This leads to employees and employers struggling to understand workplace entitlements and cultivate flexibility within working arrangements,” Ms Brown said in a statement.

“The ARA’s proposed variations to the GRIA seek to promote clearer guidelines around working conditions, empowering employees to understand their rights while also fostering greater transparency and flexibility in working arrangements.”

The ARA noted that for the arrangement to operate, the employee would need to agree in writing.

Woolworths is also pushing for he change in minimum conditions for workers. Picture: Britta Campion / The Australian

Proposal cops backlash

Victoria Premier Jacinta Allen has slammed the proposal, labelling it “corporate greed”.

“It’s hard to believe that in a cost of living crisis, our biggest retailers would even consider cutting people’s wages and conditions,” Ms Allen wrote in a statement on X. 

“It’s even harder when you consider the record profits that corporations have made over the past 12 months.

“These are the workers who got us through the pandemic. And having spent years working behind supermarket registers – I know what the job is like.

“These are some of our hardest working Australians. They deserve their penalty rates.”

Ms Allen vowed her government will fight the proposal “tooth and nail” if approved. 

Coles reported a net profit after tax of around $1.1 billion in the 2024 financial year, up 2.1 per cent, while Woolworths reported a $1.7 billion net profit after tax for the 2023/24 financial year, down 0.6 per cent from the previous year.

Victorian Premier Jacinta Allen called out the proposal as ‘corporate greed’. Picture: NCA NewsWire / David Crosling

The Australian Council of Trade Unions Assistant Secretary Joseph Mitchell criticised the proposal as an “attack on retail workers’ ability to deal with cost-of-living pressures”, calling on politicians to take action to protect workers.

“Australian Unions call on all political parties to pledge they will protect the penalty rates of working Australians from this type of corporate greed,” Mr Mitchell said in a statement.

“Retail workers risked their health to keep supermarkets open during the pandemic. It’s outrageous for big companies like Coles and Woolworths to demand their undervalued workforce work longer hours with reduced protections and lower wages.

“Not only do these workers have to deal with price gouging from the big retailers like everyone else, but now they are also expected to stand by while the supermarket duopoly pushes to strip away their wages and conditions.”

Mr Mitchell warned the case could set a precedent for other businesses to push for lower wages across different industries.

“The greed of these giant companies knows no bounds Unfortunately, this retail plan is part of a broader agenda by big business to maximise profits by making their employees’ lives less financially secure.”

The case will be heard by the Fair Work Commission in March. 

It comes after the Australian Competition & Consumer Commission accused Woolworths and Coles of misdealing consumers through discounting prices claims on hundreds of supermarket products.

The ACCC alleges the supermarkets offered certain products at a regular price for at least 180 days before increasing the price of the product by at least 15 per cent for a relatively short period of time and then placing it in their “Prices Dropped” or “Down Down” program.

The ACCC claims the display of the Prices Dropped and Down Down tickets was misleading, as the price of the products was higher than or the same as the regular price at which the supermarket had previously offered the products for sale.

Woolworths and Coles both deny the allegations of misleading consumers.

Coles and Woolworths were both contacted for comment, however, news.com.au was referred to the Australian Retailers Association.