Coles has begun negotiations for a new industrial agreement with its workforce of more than 75,000. These negotiations come more than a year after the Fair Work Commission decision striking down its previous deal. Any new agreement that restores long-lost award entitlements, including penalty rates, could have a significant flow-on effect across the retail sector. 

Before the commission’s ruling against its previous agreement, the supermarket giant had for years operated under agreements that stripped workers of award minimum penalty rates for weekend, overtime and night work. As a result, many Coles workers earned substantially less under the agreement than they would have had they been paid under the retail award.

Unfortunately, the striking down of the Coles agreement in 2016 did not mean an immediate improvement to the penalty rates of Coles workers. Instead, our conditions reverted to those of an earlier and substantially similar agreement. This agreement is currently subject to an appeal in the commission on the grounds that it too leaves workers worse off than the award. 

Coles’ decision to enter negotiations for a new agreement is significant. If Coles is forced into an agreement that takes award wages and conditions as its baseline, it will have ramifications for enterprise bargaining affecting hundreds of thousands of other workers.

Woolworths has refused to finalise a new deal with its own workforce until the outcome for Coles becomes clear. Woolworths and many other large retailers historically have conducted bargaining on much the same basis as Coles – entering SDA-brokered deals that trade off numerous award entitlements for marginally higher base wages that leave many workers on less overall pay than the award minimum. The Fair Work decision against the Coles agreements leaves these similar agreements in a legal limbo.

If Coles is made to negotiate an agreement that does not undercut the award, it is likely that these other companies will be too – an outcome that could mean the final collapse of their decades-long strategy of using enterprise bargaining to avoid paying workers minimum award entitlements. The Australian Industry Group, which represents the interests of the country’s biggest companies, has suggested that large employers will drop enterprise bargaining altogether if they can’t use the process to erode award minimums. It has called on the government to change the law to make it easier for sub-standard agreements to be approved at the commission.

At early bargaining meetings involving Coles, the SDA and representatives from the Retail and Fast Food Workers Union (RAFFWU), the company has made it clear that some of the few over-award conditions in the agreement are under threat. On the list of items Coles wants cut from a new agreement are minimum weekly hours for part-time workers and adult wage rates for 20-year-olds. It also proposes that new starters be paid less than existing workers and that future wage increases for all staff be limited to the annual minimum wage increase.  

Due to the involvement of the newly formed association, RAFFWU, this bargaining round is the first time that Coles workers have had the opportunity to be informed about the progress of negotiations. While the SDA emphasises backroom dealings,  RAFFWU – the bargaining representative of a small number of Coles workers – openly reports on the company’s proposals.