Coles Criticised Over Refusal to Comply with Fair Work Commission Rulings
Thursday 16 June 2016 @ 11.10 a.m. | Industrial Law | Legal Research
The contentious issue of penalty rates continues to cause heated debate as the media report that Coles Supermarkets have "defied" the Fair Work Commission (the FWC) by refusing to boost penalty rates for those of its workers who have been ". . . left worse off under a controversial wage agreement struck with the shop assistant's union [Shop, Distributive and Allied Employees Association (the SDA)]". The refusal by Coles has the effect that Coles' employees who work mostly at nights and on weekends will continue to be paid less than they would be under the conditions of the award - the basic safety net for retail workers.
Background to the Case
The position in which Coles and its workers find themselves results from an initial decision of the FWC in Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2015] FWCA 4136 (10 July 2015), which was an application for approval of a single-enterprise agreement under section 185 of the Fair Work Act 2009 (Cth).
The agreement approved by the FWC in the case is known as the Coles Store Team Enterprise Agreement 2014 - 2017 (the Agreement) and was stated to cover “wages-paid” team members employed by Coles who are engaged to perform work for stores throughout Australia in respect of the classifications listed in the Agreement. The Agreement covered 77,507 employees of which 36,016 participated in the voting process, and of whom 32,966 voted in favour of making the Agreement.
In approving the Agreement, the FWC Commissioner considered the "Better off Overall Test" (the BOOT - defined in Section 193(1) of the Fair Work Act 2009(Cth)) and whether the Agreement came within the BOOT and after receiving undertakings from Coles addressing anomolies approved the Agreement.
As a result of the decision, the approval of the agreement raised base hourly rates of pay, but cut penalty rates, having the effect of dividing the Coles workforce between those who work predominantly during the day on week days, and those who relied on penalty rates from weekend and after hours work.
Challenge to Original Approval
Affected by the decision approving the agreement, a student, Mr Duncan Hart who worked part-time at a Coles Supermarket in Brisbane, took action in the FWC claiming that the agreement between Coles and his union, the SDA, had left thousands of workers in a worse position than they would be under the Award, and was therefore invalid under the BOOT which stipulates no worker can be left worse off than under the Award.
In Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2016] FWCFB 2887 (31 May 2016) the FWC recently found that some of the 77,507 Coles workers covered by the Agreement would be left out of pocket, and asked Coles to lift penalty rates.
Coles' Refusal to Comply
In its decision, the FWC gave Coles 10 days to remedy the failings in the agreement before it quashed its original approval of the workplace Agreement forcing Coles to renegotiate wages and conditions for its workforce of 77,507 employees.
However, recent media reports indicate that Coles, in a press release, has indicated that its 77,507 workers would now revert to their previous 2011 agreement, but that it would continue to pay the higher hourly rates contained within the now disputed Agreement so as to ensure no Coles worker's pay was suddenly cut.
The position appears to be one of deadlock with Coles being reported as saying:
"Coles sought to participate constructively in the Fair Work Commission's deliberations. While we respect the decision of the commission, the undertakings proposed were impractical for our customer service model, . . ."
On the result, Mr Hart is quoted as saying:
"While it's good that the agreement has been quashed because it was not good enough to pass the BOOT, this also points to the fact that the only thing that will defend workers' rights now is a strong union, as the commission doesn't even have the power to force Coles to pay the penalty rates mandated by the award."
Mr Hart is reported as being unsure what his next step is but he is now entitled to make an application to have the Coles workers shifted to the conditions of the Award.
The SDA has been reported as indicating that it:
". . . maintained its position that the original agreement it negotiated with Coles left the vast majority of the Coles workforce better off, despite that commission's ruling that it did not pass the [BOOT] test."
Though the Coles Agreement is not a settled matter yet - it is clear that "penalty rates" will continue to be a hotly debated and contested matter, especially in industries like retail and services.
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Sources:
Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2015] FWCA 4136 (10 July 2015)
Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2016] FWCFB 2887 (31 May 2016)
Coles refuses to boost penalty rates for workers despite Fair Work ruling (ABC News)
