Coles defends pay deal with shop assistants’ union

Union leaders have slammed the supermarket giant’s refusal to make wage changes suggested by the workplace umpire.

Coles says changes urged by the Fair Work Commission don’t reflect its pay deal with workers.

Supermarket giant Coles has said it will not make changes urged by the Fair Work Commission to its agreements with 75,000 workers, despite the urgings of unions it once had onside.

The development will see the Wesfarmers-owned (WES) retailer revert to a prior 2011 agreement, as the commission last week ruled the current deal invalid without changes being delivered by June 10.

Coles’ agreement with the Shop Distributive and Allied Employees Association was supported by the Fair Work Commission and over 90 per cent of the retailer’s workforce last year, but concerns the new deal would see some workers paid below award rates led the commission to press for changes.

“These suggested changes are impractical for our team members, would significantly reduce the level of service we can provide our customers, and would not represent the agreement our team members voted overwhelmingly to endorse,” the retailer said in a statement.

The SDA has since criticised the reaction from Coles, suggesting the changes requested would not have significantly impacted the retailer’s operations.

“The SDA urged Coles to make undertakings and it is the SDA’s view that by doing so the company would have been acting in the best interests of its workforce,” the workers’ representative said in a statement.

It added it was “extremely disappointed” by the response.

Coles looked to appease concerns within a section of its workforce by offering a guarantee no employee would see a reduction in their base rate of pay, while penalty rates would be untouched and the July wage increase tied to the now invalid agreement would still be recognised.

The retailer said it would now hold “listening sessions” with employees over coming months to determine its next move, while the SDA has sought to recommence negotiations for a new agreement.

In the meantime, its store staff will be covered by the 2011 retail agreement, while its meat team members will be covered by state-based agreements that applied prior to the most recent deal and its online team will be protected by the General Retail Industry Award.

The actions come after the Fair Work Commission said last week the Coles deal failed the “better off overall” test under industrial law.

“The EBA provides for a ­higher hourly rate than the relevant award rate, but applies lower ­penalty payments for evenings, weekends and public holiday,” the commission said.

“For some employees, particularly those who work primarily at times which attract lower penalty rates under the agreement when compared to the award, the loss in monetary terms is potentially ­significant.”

New benefits provided in the agreement would not offset the lower penalty rates, in the view of the commission.

Coles said it tried to work constructively with the Fair Work Commission but argued a potential remedy to limit the number of penalty rate hours worked was not feasible.

“While we respect the decision of the commission, the undertakings proposed were impractical for our customer service model,” the retailer said.