Woolies began monitoring staff like never before. It had a chilling effect on workers

When new Woolies boss Amanda Bardwell started her role in September, the supermarket giant’s board must have been hoping they could put a disaster of a year behind them and plough into the all-important Christmas season with fresh legs.

Woolies chairman Scott Perkins praised the skills that Bardwell, a Woolies veteran, brought to the top job, including her ability to “carry a team” and deliver on the need for “relentless execution”.

The scene at Woolworths’ distribution centre in Dandenong South, where a week-long strike has left shelves bare in stores all over Melbourne.Credit: Wayne Taylor

Its previous chief, Brad Banducci, was dogged by a series of scandals leading up to his retirement, which started with the ill-advised decision to drop Australia Day merchandise.

This was soon followed by a disastrous appearance on Four Corners where he abruptly walked out over a query about the lack of supermarket competition.

“I can be absolutely emphatic on that point … there was no change to the timetable, no expedition at all,” he told reporters in a briefing announcing his departure just days after the interview aired.

There were also serious concerns for investors due to declining financial results and market share loss against an ascendant Coles, as well as rising regulatory scrutiny and a crescendo of outrage from Canberra looking for culprits to take the blame for our cost-of-living crisis.

But the honeymoon for Bardwell did not last long.

Further financial downgrades in October only confirmed that shoppers did not view Woolies as a destination for cheap groceries, while the competition watchdog brought legal action against Coles and Woolies, accusing them of misleading millions of customers with their pricing practices.

It stoked public outrage even further. Meanwhile, Woolies investors have been saddled with $7 billion in losses since August thanks to a sagging share price.

So, a prolonged strike at four of its Victorian distribution centres – which are the pumping heart of its grocery business and critical to keeping the shelves full at Dan Murphy’s and other stores run by its liquor and pokies spinoff Endeavour – was the last thing the struggling group needed in the lead up to Christmas.

It began when Woolies failed to reach an agreement with the United Workers Union (UWU) after four months of negotiations. About 1500 workers at four Woolworths warehouses in Victoria began indefinite strike action over pay and conditions from November 21.

Woolworths CEO Brad Banducci announced his departure date just days after walking out of his interview with ABC TV’s Four Corners.Credit:

Woolies has highlighted the pay side of the dispute. “The UWU is seeking pay increases at these sites in excess of 25 per cent over three years, materially above inflation, at a time when Woolworths Group is actively working to keep food and groceries affordable for customers facing ongoing cost-of-living pressures.” But Woolies was happy to give workers at another Victorian distribution centre a 12.5 per cent pay rise in their first year.

This, combined with the fact that UWU strikers are now into their third week without pay, signals the bitter struggle over work conditions at these centres, which started with the introduction of “the framework” this year.

The Coaching and Productivity Framework, as it is formally known, is a worker performance management program that was introduced across warehouses run by its distribution arm, Primary Connect.

The point of contention is the disciplinary action workers face if they fail to achieve 100 per cent adherence to pre-determined pick rates. What was previously a non-enforced goal is now a mandatory requirement.

Lauren Kate Kelly, an academic at RMIT who has worked with the UWU on this issue, describes it as an example of scientific management theory – which came into vogue last century – but armed with the increased surveillance and measurement possible in a digital world.

“Much like inventory, workers’ bodies also become a data point to be monitored in terms of speed and movement. Engineered standards encode the assumption that human labour can be rationalised in the same way as the activity of a machine,” she said in a column for The Conversation.

The effect on workers has been chilling, says UWU, which has labelled the move unethical, outrageous and unsafe. “Every minute is monitored,” one worker says. “Basically, you have to work like a robot. It monitors every single movement, every single day.”

Professor John Buchanan from the University of Sydney Business School, who has studied this area extensively, said this was a controversial long-term practice for the warehouse/distribution centre industry as exemplified by the leader of the pack: Amazon.

“Warehousing has been at the cutting edge of this kind of time surveillance and control business management for decades,” he said. “Amazon have just taken it to the next level.”

Woolworths veteran Amanda Bardwell took over as chief executive in September. Credit: Renee Nowytarger

And Amazon’s global expansion has ensured others, such as Woolworths, have followed this lead.

For Woolies, the framework – which is suspended at present – is a necessary tool to ensure adequate productivity. The group also says it is flexible when it comes to applying these performance standards to personal circumstances or abilities. The framework also includes exemptions “for when a team member is unable to perform to standards, including pregnancy, disability or injury”.

“The measure of work we use has been developed based on the time it should take a person with reasonable skill, applying reasonable effort, working at a safe and conscientious pace, that can be maintained for the duration of a shift, to complete a task,” a spokesman said.

No such measure applies for the under-pressure Bardwell.

“It has certainly been a challenging year, no question,” Bardwell said when fronting Nine’s television news this month as the scale of the looming disaster became public. “Our focus is really on our customers and making sure we can get those products back on the shelves so that when they come into a Woolies store they are able to access them.”

The distribution centres affected include the Lineage cold-storage site in Laverton, in Melbourne’s south-west, which has affected dairy supplies in Victorian and southern NSW supermarkets.

But the pain spreads beyond Woolies to Endeavour’s liquor and pub outlets – mostly in Victoria – thanks to the impact on the Melbourne Liquor Distribution Centre, which feeds through to 90 pubs and their bottle shops in Victoria as well as 333 BWS stores and 74 Dan Murphy’s stores in Victoria.

Both Woolies and Endeavour are scrambling to get alternative delivery lines in place to avoid shortages, but the Woolies announcement this week indicated that its striking workers were not the only ones taking a hip-pocket hit. It reported a $50 million revenue impact from lost sales over the first two weeks of the strike.

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

On Friday, Woolies sought an urgent order to prevent the union from blocking access to its Melbourne South Regional Distribution Centre in Dandenong South, along with three other sites affected by the ongoing strike action.

UWU national secretary Tim Kennedy said any order wouldn’t resolve the underlying problems, and workers would continue their strike.

“We’re encouraging Woolworths to not be distracted by trying to bully their workers back into the workplace, but show some respect for them and reach agreement.”

Analysts said the industrial action represented millions of dollars in lost earnings and higher costs due to additional logistics costs and wastage. And that does not include the long-term brand damage.

“The disruptions may also lead to loss of market share due to limited availability and reputation risk,” Bloomberg Intelligence said.

Liquor shelves are also empty at Endeavour’s Dan Murphy’s and BWS stores due to the Woolworths strike. Credit: Hannah Hammoud

The latter was easy to observe in Woolies supermarkets this week.

Isabelle Blackburn, who visited the Woolworths Metro on Elizabeth Street in Melbourne on Thursday, left empty-handed after finding the store out of water on a 32-degree day. “It’s a hot day and I just wanted a bottle of water and there was none,” she said.

Blackburn said she was unaware of the reason behind the empty shelves, but planned to head to a nearby 7-Eleven or Coles in the hope of finding the essentials she needed. “Now the plan is to go find another shop. It’s just inconvenient.”

Endeavour says it has avoided shortages at its pubs, but it confirmed that its retail outlets were a different story.

“Endeavour Group is not party to this dispute, and we have implemented alternative delivery arrangements to get as much stock to our stores as we can, to manage shortfall. This includes direct-to-store deliveries from suppliers where possible, but the degree of impact on stock differs across our stores.”

Woolworths says it does not plan to extend the performance framework to other parts of its logistics business, such as the online retail operations that Bardwell used to run out of the group’s funky WooliesX office in Sydney’s Surry Hills. But the business case for more speed and efficiency is compelling.

With online sales booming during the pandemic, Banducci predicted that speed of delivery – and the convenience this delivers to customers – will eventually outweigh factors such as price in consumer decision-making.

This would be a godsend for our grocery giants, which say their earnings are being kept in check by intense competition from upstarts such as Aldi, as well as new rivals Bunnings and Amazon.

But Bardwell is probably focused on more immediate concerns right now, such as getting the striking workers back onside for Christmas.

“We’re working on it day and night, as you might imagine, to get a breakthrough, so our team can get back to work in those distribution centres,” she told Nine this week. “They want to get back to work, they want to get paid before Christmas so we can get those products back on the shelves consistently for our customers.”

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