Response to ABC 7:30 Report on Coles Decision and Enterprise Bargaining

On 4 April 2017, ABC 7:30 ran a story purporting Enterprise Bargaining was at risk.

The story continued a manufactured narrative SDA has been pressing since mid 2016 when its practice of negotiating enterprise agreements which undercut the Award minimum with some of Australia’s largest retailers and fast food employers was exposed.

ABC 7:30 relied on input from SDA and the Business Council of Australia. Many of the employers with whom SDA has negotiated enterprise agreements which undercut the Award minimum are the largest members of the BCA.

While the Productivity Commission is referred to, it is not quoted and appears to be referenced to an SDA quote.

Greg Combet makes no substantive comment other than to say Enterprise Bargaining is important.

A single barrister makes reference that appears to suggest a low paid worker should not be permitted to ensure the law is properly applied.

The thrust of the article is a continuing false narrative of SDA. Since June 2016 SDA has been feeding a line that the Coles decision is a new interpretation of the Better Off Overall Test (the test by which each enterprise agreement is measured that requires each worker to be better off overall.)

This is a deliberately manufactured untruth. No competent lawyer would argue this is new. The test has been long established, and well accepted, that each worker must be better off under the agreement compared to the award. No lawyer, for Coles or SDA, argued otherwise in the Coles case. If they had they would have been laughed out of the Fair Work Commission. The test permits classes of workers to be assessed, rather than each individual. The Coles decision dealt with the situation where many classes of workers – including any non-casual workers working a modest proportion of their hours on weeknights or weekends – were substantially worse off.

In fact, Coles’ own analysis showed two thirds of non-casual workers at the store they chose were financially worse off.

In the days before the Coles decision (and SDA’s subsequent lie that it represented some remarkable new precedent) McDonald’s and SDA were exposed for cutting a similar deal. It left two thirds of workers worse off – including most casual workers. In its defence, McDonald’s issued a statement saying every worker must be better off because that is the test the Fair Work Commission must undertake:

Enterprise Agreements are subject to the scrutiny of the Fair Work Commission who will only approve an Agreement if each of the employees covered are better off overall compared to the relevant standard. Our Agreement passed this test and that is why it was approved and implemented.

Even the barrister in the ABC 7:30 report admits the words of the Act are clear. That is because they are and they have always been understood to mean every worker must be better off. And here is the rub. The Fair Work Commission relies on the evidence of the parties involved in the agreement. That is, the SDA and the employers who are members of the BCA. They make statutory declarations – where the employer states the test is met.

We now have a situation where SDA and Australia’s largest employers have worked together to strip hundreds of thousands of low paid workers of their penalty rates and other rights. Stripped them of far more than the recent penalty rates decision of the Fair Work Commission. The real story is how that happened, why that happened, and how have they been allowed to get away with it.

So what is going on?

We need to reiterate, the business model of SDA cutting sell out deals with the large employers is broken. Despite the rhetoric of SDA, none of the large retailers are negotiating new agreements. Not only is the Fair Work Commission awake to their practice, the Retail and Fast Food Workers Union is watching and will pounce on any attempt to implement a new cut price SDA deal.

Unless SDA can provide a direct financial benefit to these employers, their relationship will wane. Why would Woolworths, Coles or McDonald’s continue recruiting thousands of members to SDA if it doesn’t get its end of the bargain – hundreds of millions in saved wages.

The termination of one of these agreements will make this clear. There will no longer be any reason for these employers to engage in the outrageous business practice with SDA of slashing the minimum conditions of their low paid workers. This is the real house of cards. Without sweetheart arrangements to recruit and have fees collected for it, SDA will crumble and the recipients of its largesse (peak bodies and the ALP) will go into financial shock. Of course, the low paid workers who have had billions in wages stolen from them, will substantially benefit.

After the Coles decision in 2016, word filtered out that SDA was lobbying in Canberra to weaken the Better Off Overall Test. That is all it has left. Unless it can continue to offer the reduction in wages below the minimum Award levels of low paid retail and fast food staff to these employers, it has nothing to bargain.

And that is why ABC 7:30 ended up with this story. When the journalist contacted RAFFWU a week or so ago, he was looking for a new angle. Clearly he found it. But in the desperation to put something out, ABC 730 relied on the fallacies spread by SDA and their business partners at the BCA. It swallowed this nonsense hook, line and sinker. Worse, it cast Hart and Vickers – and any other worker who dares stand up against these behemoths – as the villains.

That individual workers (Hart and Vickers) had to commence proceedings to secure back their minimum Award entitlements is shameful. Other than AMIEU supporting the Hart appeal, they have had no institutional support. SDA and Coles have vigorously defended each application – against the interests of their members and staff. The proposal it is somehow inappropriate or ought be stopped from happening is quite confronting.

We need to be clear, if the quote from the BCA is accurate it is simply untrue. These workers do not get paid more than workers on awards. Their action, if they are successful, will see them secure the minimum Award conditions. If SDA and BCA have their way, they will be stopped and the selling out of Australia’s lowest paid workers will continue.