Coles workers approve landmark new agreement

More than 18 months after the Fair Work Commission struck down the enterprise agreement negotiated between Coles and the Shop, Distributive and Allied Employees’ Association (SDA), a new agreement has been voted up by Coles workers.

If approved by the Fair Work Commission, the agreement will begin operation at the end of April.

The new agreement ends a practice which had, for decades, been the operating principle of SDA enterprise agreements in the retail industry: the “trading off” of important award rights and conditions in return for a higher base rate of pay.

Previously, Coles workers would receive a base rate marginally higher than the award minimum, but miss out on penalty rates, laundry allowances and overtime rates. The result of this, as shown by the successful 2016 appeal to the commission, was that large numbers of Coles workers were taking home less than they would have if they were paid under the basic retail award.

The new Coles agreement is substantially a reproduction of the General Retail Industry Award, with a few additions. Coles workers will for the first time receive the award minimum penalty rates for night and Saturday work. For many, the difference in pay will be stark. A permanent night-fill worker doing four shifts from 8pm to midnight on weekdays will receive a pay increase of approximately $80 a week.

The new agreement has downsides. Being based on the award, it does not guarantee any pay increases for workers beyond the annual minimum wage increases set by the commission. Over the last five years, the Fair Work Commission has increased the minimum wage by an average of 2.76 percent, but in some years has not handed down any increase at all.

Coles employees will receive a protected rate of pay based on the slightly higher base rate they earned under the old agreement. While this means that no worker will be worse off under the new agreement where the base rate is lower, the extremely arcane way it will be implemented means that hours worked during non-penalty rate times will be used to offset the benefit of the new penalty rates. Workers on the protected rate will receive only half of the minimum wage increase set by the commission until their higher rate is absorbed by the award rate.

These downsides help to explain why some 5,000 workers voted “no” to the agreement. The “no” campaign was spearheaded by the newly formed Retail and Fast Food Workers Union (RAFFWU), which helped to hold the SDA to account during the negotiations.

Even though more than 40,000 voted “yes”, RAFFWU’s argument that the agreement could have been substantially better is true. The new agreement is an indictment of the SDA and its refusal to organise workers to take any form of collective action. The award is the bare legal minimum, not a measure to aspire to.

Despite the drawbacks in the deal, it is a significant advance to restore penalty rates at one of Australia’s largest employers. What’s more, it sends a signal to other large retailers. No longer can they get away with the old method of negotiating award-undermining deals with the SDA. Hopefully, the new Coles agreement will herald the reintroduction of penalty rates across the retail sector as new agreements are negotiated on this basis.

While the SDA has been keen to claim credit for the new agreement, the reality is that it fought tooth and nail to prevent its favoured model of selling out workers’ rights from becoming redundant. The restoration of rights in the new Coles agreement should be seen as the achievement of rank and file worker activists.