Woolies shortages to continue as industrial dispute drags on

Shoppers will continue to find bare shelves at Woolworths as the supermarket giant prepares to face off against the United Workers Union over a lengthy and bitter industrial dispute.

It is understood a long-running strike by 1500 workers at four Woolworths warehouses over pay and conditions has increased custom for rivals, including Coles. Woolworths said the strike, which began on November 21, had cost it at least $50 million, as consumers buy less when confronted by bare shelves or fridges, or shop elsewhere.

Shortages include drinks and toilet paper, and even if the supermarket is successful in forcing workers back to the tools, resupplying retail outlets will take time.

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

The dispute, to be heard in the Fair Work Commission on Friday, has led to alcohol shortages at some Dan Murphy’s and BWS stores in Victoria and southern NSW, owned by Endeavour Group. Endeavour is a customer of Primary Connect, Woolworths’ supply arm. The Age understands that Endeavour could pursue legal action against Woolworths to recoup losses from the delivery delays.

Woolworths launched its Fair Work Commission action on Tuesday after failing to reopen its warehouses, alleging union blockades were a breach of good-faith bargaining requirements.

Chris Gardner, partner in employment and industrial relations law at Seyfarth Shaw, said the key question for the commission was whether picketing undermined collective bargaining to justify orders to stop it.

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

“The commission has demonstrated a reluctance to find as such in other cases,” Gardner said.

“Illegal picketing, where it happens, is a powerful instrument that unions can deploy to coerce employers into agreeing to their terms.

“And they do so in the knowledge that the legal remedies are less than perfect for employers.”

RMIT University’s Anthony Forsyth expressed surprise that Woolworths had pursued the union at the commission rather than through the courts. He said it would be unusual for the commission to terminate a picket or industrial action because of a breach of good-faith bargaining.

New Woolworths chief executive Amanda Bardwell. Credit: Louise Kennerley

Forsyth said an employer would typically apply to the Supreme Court to end a picket because it was an unlawful public nuisance, interfered with its contracts with employees, or it was affecting supplies on a large scale.

Woolworths confirmed it was not pursuing legal action in the Victorian Supreme Court.

Forsyth said: “Christmas is the obvious kind of deadline that is looming for everyone. For Woolworths, getting supply to normal as soon as possible. For the union, the longer it goes on, it becomes more about being able to hold the workers together … without pay.”

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.

Woolworths’ dispute with the United Workers Union over warehouse pay and conditions is affecting supply.Credit: Bloomberg

They also want pay for all workers at the distribution centres increased to at least $38 an hour in the first year of an agreement, with further increases in following years.

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.

Monash University’s Greg Bamber has done research on Woolworths warehouses and said it was important for employers to consult workers and unions on changes resulting from technology.

“There are pressures here because companies like Amazon, Coles, Woolworths face demands from customers who want their deliveries immediately,” he said.

“The issue is for the workforce there’s a race to the bottom in terms of the way workers are being managed and that’s why we need guardrails [about the use of artificial intelligence in the workforce].”

The Australian Retailers Association has urged the union to consider the “safety and wellbeing” of staff, shoppers and the community through the industrial action.

“If an employee wishes to return to work, they should be able to do so without fear of retribution,” association chief industry affairs officer Fleur Brown said.

The dispute has not reduced food donations to charities.

Foodbank Victoria chief executive Dave McNamara said: “At this stage there has been no decline in donations, which is gratifying considering this is our period of peak demand. Over the next three weeks leading into Christmas, we’ll see a 10 per cent jump in demand for our food, so we need all the donations and support we can get right now.”

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

Both Woolworths and the union have said it’s within the other’s power to reach an agreement and get products back on supermarket shelves.

A United Workers Union spokesperson said the union was committed to ongoing negotiations with Woolworths and reaching agreement that provides safety and cost-of-living wage increases. “This is the simplest and most respectful path forward and will see Woolworths shelves stocked very quickly,” the spokesperson said.

- With Hannah Hammoud

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