Woolworths to pay 2.5 per cent pay increase in July

The supermarket giant will pass on a 2.5 per cent pay rise to employees from July 1 after a Fair Work Commission ruling.

Woolworths will pass on a 2.5 per cent pay rise to employees from July 1 after a Fair Work Commission ruling. Picture: NCA NewsWire/David Crosling

Supermarket giant Woolworths will pass on a 2.5 per cent pay rise to employees from July after the Fair Work Commission ruled this year’s minimum wage increase for retail workers should be delayed until September.

The Shop, Distributive, and Allied Employees Association called on retailers to pay the increase from July and ACTU secretary Sally McManus slammed the delayed rise as “pretty shameful”.

SDA national secretary Gerard Dwyer said on Thursday “there is no justification for delaying the increase for retail employees for two months at a time when the retail sector is outpacing economic forecasts”.

“With major retailers and supermarket chains recording record profits, there is simply no reason for delaying the increase beyond July 1,” he said.

“The SDA will be engaging with retailers to insist on immediate wage justice for their tens of thousands of workers by paying the increase from the beginning of next month as had always been the case until the pandemic struck.”

In its decision on Wednesday, the commission warned that more lockdowns and the pace of the vaccine rollout were risks to the economic recovery, awarding an $18.80-a-week ­minimum wage rise, but delaying the increase by up to four months for workers in Covid-impacted ­industries.

The enterprise agreement covering Woolworths employees states that annual rises awarded by the commission should apply from July 1 each year, which is traditionally the date that the commission makes the increases operative.

But Woolworths last year initially sought to delay the rise when the commission said the retail sector increase should be pushed back by seven months to February this year due to the impact of the pandemic.

After the SDA and the company took legal action, Woolworths agreed in August to pay the increase and backdate it to July last year.

Woolworths said on Thursday it had agreed to pay this year’s 2.5 per cent increase - equivalent to $20.80 a week under the award - from July.

Woolworths Supermarkets managing director Natalie Davis said the company would “be passing on the annual pay increases through our retail enterprise agreements in July”.

“This is consistent with the approach we agreed with the SDA last year,” she said.

“Our frontline team members have done an extraordinary job for our customers and the community throughout the pandemic.

“ We’re incredibly grateful for all their hard work and dedication as they’ve continued to safely provide the food and everyday needs our communities rely on across Australia.”

A Coles spokesman said its team members were employed under enterprise agreements “which are already paying above relevant current award rates”.

“Our team has worked very hard during Covid and we have recognised that with thank you payments last year and our decision to implement last year’s Fair Work increase four months ahead of the required time frame,” he said.

“We will look carefully at the commission’s decision which was only handed down late yesterday.”

National Retail Association chief executive Dominique Lamb said retailers welcomed the deferral for retail, hair, beauty and restaurant workers but were concerned that the increase did not conform with the CPI.

“Retailers would have liked a more balanced approach that would have seen a more modest rise given there remains much uncertainty in the business community,” Ms Lamb said.

Restaurant & Catering Australia welcomed the decision to delay increases in the hospitality sector until November but said the 2.5 per cent “could send thousands of small cafes and restaurants to the wall“.

“It is unfathomable that the hospitality sector, which has been the hardest hit sector of our economy, should have to wear two wage increases within a year totalling 4.25 per cent,” its chief executive Wes Lambert said.

“This is on top of a further increase to the superannuation guarantee of 0.5 per cent which begins on 1 July, resulting in a total increase of wage costs of nearly 5 per cent in 9 months.”