Coles-union deal paid below legal safety net

A deal between Coles and the shop assistants union over the pay for 75,000 workers has been struck down by the industrial umpire.

Duncan Hart said yesterday’s decision was “all we could have hoped for”. Picture: Glenn Hunt

A deal between Coles and the shop assistants union governing the pay for 75,000 workers has been struck down after the industrial umpire upheld an appeal by a part-time Brisbane trolley collector who claimed the agreement underpaid some employees.

The rare intervention by the full bench of the Fair Work ­Commission yesterday could cost Coles millions of dollars in higher wages for part-time and casual workers. It has cast doubt on “sweetheart” deals between the union and some of Australia’s biggest ­employers.

The agreement between Coles and the Shop Distributive and ­Allied Employees Association, which also applied to Bi-Lo stores, was endorsed by more than 90 per cent of the Coles workforce and approved by the Fair Work Commission last year.

However, Duncan Hart, a socialist campaigner and part-time Coles worker, appealed, saying the deal paid workers below-award rates. The challenge was joined by the meatworkers union.

The commission yesterday sided with Mr Hart, concluding the deal paid below the legal safety net and so 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 decision states.

“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.”

Other benefits offered by Coles under the deal failed to make up for the lower penalty rates, the commission added.

Coles has until June 10 to give a legal undertaking to fix the ­underpayment, or the agreement will be declared invalid.

Legal experts said yesterday the decision could jeopardise ­future SDA deals with employers, including McDonald’s, Bunnings and Woolworths. The deals have been criticised by left-wing ­unions for paying below-award wages, while driving members to the conservative union instrumental in shaping Labor policy on abortion and gay marriage.

Employers are also required to make payments to SDA-linked superannuation, retirement and training funds under the deals.

Penny Vickers, an SDA shop steward and part-time Coles worker who stacks shelves three nights a week, has also raised ­objections against the deal with the union. She told The Australian yesterday that she voted in favour of the deal without realising it paid under the award, and also advised others to do so.

“I expected the Fair Work Commission to make sure that (the agreement) passed the better off overall test”, Ms Vickers said.

Dave Oliver, national ­secretary of the ACTU, said the decision showed “the system is working”.

Coles chief executive John Durkan warned last week a decision against the agreement risked subjecting workers to “older outdated and less-beneficial workplace agreements”. A spokesman said yesterday the retailer “will respond to today’s decision in due course”.