How Coles rips off its workers

We’re at the Fair Work Commission in Melbourne. The wages and conditions of 77,000 workers are on the line. Coles Supermarkets has deployed a small platoon of the best lawyers and “expert” witnesses that money can buy.

Their task? To fend off a legal challenge from a Coles worker – trolley collector and Socialist Alternative member Duncan Hart. Also recently joined to the case is the meatworkers’ union, the AMIEU.

Duncan and the meatworkers say that the Coles 2015 enterprise agreement leaves most Coles workers worse off than the retail award, which should be the legal minimum. Their case is based on research undertaken by Josh Cullinan, an industrial officer for the tertiary education union (NTEU).

Coles’ agreement pays no penalties for evening work before 10pm (compared to a 25 percent penalty in the award), no penalty rate for Saturday (50 percent in the award), and only a 50 percent penalty rate on Sunday (double time in the award). This leaves many workers $50, $70, or even $140 per week worse off than the award.

We still have a long way to go in mobilising retail workers in numbers to challenge the sweetheart deals that rip off our wages, but you have to start somewhere.

It’s standing room only in the hearing. Meatworkers, retail workers, unionists and friends and comrades of Duncan are treated to a first class courtroom drama, at once laughable and sickening, from a string of Coles’ “expert witnesses”. Their technical name is “hired guns”. Their job is to convince the commission that black is white, white is black and a million dollars a week of corporate wage theft leaves workers better off.

“Expert” number one was Bruno Cecchini, a partner at the giant accounting and consultancy firm Ernst and Young – whose corporate motto is “Building a better working world”.

Cecchini’s analysis, some thousand pages of it, admits directly that the lack of penalty rates in the Coles agreement leaves many workers significantly worse off financially. But, in a theme repeated throughout the day, Cecchini explained that, despite lower wages, workers were better off because of all the other great features of the agreement.

His line of argument quickly runs into problems, however. Cecchini is forced to admit that many award conditions – allowances for freezer work, first aid, higher duties and part time overtime rates – had been left out of the figures he received from Coles’ lawyers.

Yes, Cecchini says, these factors would have made a difference to his analysis had he had taken them into account. But no, he says, he hadn’t done this. In fact, he concedes, no-one at Ernst and Young had actually consulted the award.

Cecchini goes on to explain that, in assessing the “benefits” of the agreement, it was assumed that, every worker, every year, would access every hour of every single leave entitlement in the agreement.

Siobhan Kelly, representing Duncan Hart and the AMIEU, asks whether an employee could be better off under the agreement only if they took “8 hours blood donor leave; 10 days’ defence service leave; 5 days of unpaid leave; 11 days of carer’s leave; 3 days’ compassionate leave; 3 days’ emergency services leave; 3 days’ natural disaster leave; were off work for 26 weeks with [a] serious injury” receiving accident make-up pay and were made redundant.

“[T]hat is correct, yes”, replies Cecchini, without so much as a flicker of embarrassment.

Next up is Louise Rolland, former academic at Swinburne University and now an executive director of Ernst and Young. Unfortunately for Coles, her “evidence” is no more lucid than Cecchini’s. Rolland, for instance, says that part of the salary that Coles retail workers earn in future hypothetical jobs with future hypothetical employers should in fact be attributed to the 2015 Coles enterprise agreement.

The reason, she says, is because a flexibility clause in the Coles agreement is a significant causative factor in these workers being able to study and obtain a qualification while working at Coles supermarkets. Never mind that the clause in question provides no entitlement to receive flexibility, merely that a worker may ask for it.

Rolland’s report contains pages and pages of hallucinatory calculations that enable her to estimate “conservatively” that around $4,000 of an average Coles worker’s future annual earnings should be considered a monetary value they receive under the Coles agreement.

Amid this blossoming of creative accounting, more straightforward and less rarefied forms of number-crunching appear to have died out entirely at Ernst and Young. When asked whether she could comment on a more basic proposition – that a worker paid below the statutory minimum would have to work more and study less to achieve a living wage, Rolland was stuck. “I’m not sure”, she says.

Then there was the union. Matthew Galbraith is a national industrial officer with the Shop, Distributive and Allied Employees’ Association (SDA). This is the union that is meant to represent the industrial interests of the 77,000 retail workers employed under the Coles agreement. The leadership of the SDA is the most right wing in the country, notorious for its cosy relationship with Coles and other major employers. Its representatives did nothing to shake off that hard-earned reputation in this case.

Under questioning from Kelly, Galbraith acknowledges that the SDA made no effort to explain the agreement to its members in comparison to their entitlements under the award. When negotiating the deal, she asks, how many Coles workers did he speak to? “I didn’t speak to any members”, he says.

After a full day in the commission, Red Flag did something that had escaped all of Coles’ witnesses: we asked a couple of the Coles workers what they thought about the agreement they had to work under. For just about the first time all day, we got some plain speaking.

“It was a complete and utter farce”, Dione says. She’s a meatworker and a member of the AMIEU.

Simon, a trolley pusher who sat through the whole day, agrees: “I had spotted before voting on it that it was bad for me, so I voted no”, he says. “I would get more money if I was paid just the award rate. I don’t care about the extra tiny little things that they say make up the difference. They don’t make up the difference for me.”

Asked why the case matters, he says: “If Duncan succeeds, this will change so many agreements that already exist”.

Speaking by phone after the hearing, Duncan says that he also hopes the case can play a role in organising Coles workers.

“Today’s proceedings have made clear how much management rely on workers remaining ignorant of what’s going on. I hope the ludicrous logic on show today will be a step towards turning that around”, he says. “We still have a long way to go in mobilising retail workers in numbers to challenge the sweetheart deals that rip off our wages, but you have to start somewhere.”