Secret Woolworths deal with Shoppies union cuts wages

The conservative union at the centre of a massive wages scandal has struck an extraordinary secret deal with Woolworths to hide from public scrutiny the pay rates of supermarket workers.

Yet detail gleaned from the deal between the Shop, Distributive & Allied Employees Association (SDA) and a Woolworths-owned company indicates it has again cut the pay of low-paid workers.

Fair Work Commission president Iain Ross. The workplace tribunal has been criticised for approving sub-standard wage deals.

Photo: Pat Scala

Woolworths are employing 400 workers in "dark stores" or online supermarkets and pay rates could be as much as $3000 a year less than workers in regular Woolworths stores, documents indicate.

The opening of up to four "dark stores" in the next year to pack and move online orders is part of a bid by Woolworths to compete with the arrival in Australia of e-commerce giant Amazon.

Woolworths is set to reap savings from its secret wage deal for its ''dark stores''.

Photo: Glenn Hunt

The secret wages deal comes after a 12-month Fairfax Media investigation revealed how big employers and the SDA struck deals that left more than 250,000 workers paid less than the award – the wages safety net.

It is estimated those deals saved employers at least $300 million a year, with Woolworths one of the largest beneficiaries.

The scandal only came to light when union activists and journalists were able to access information about pay rates and other conditions, showing dozens of SDA agreements left workers paid less than the minimum rates of the award.

As a result a Coles agreement covering 77,000 workers was quashed in mid-2016 in a landmark Fair Work decision.

The SDA's Michael Donovan has been a senior official at the union for decades.

Photo: SDA

Fair Work Commission deputy president John Kovacic this month approved a request by the Woolworths-owned Jack Butler & Staff to keep wage rates confidential citing "commercial in confidence".

Emails obtained from the Fair Work file show that Woolworths executive Mauro Pisegna​ told Fair Work that Woolworths needed confidentiality "due to the unique customer offering the business will be providing (in effect the first of its type within Australia)".

Josh Cullinan, the union official who exposed dodgy wage deals between the SDA and big business.

Photo: Penny Stephens

University of Adelaide law professor Andrew Stewart said he had never come across an agreement where the wage rates were not published. He described the move as "extraordinary".

Professor Stewart said under the Fair Work Act there was an obligation for enterprise agreements to be published. "Clearly that includes the wage rates in the agreement."

Woolworths chairman Gordan Cairns wants to open four ''dark stores'' to take on Amazon.

Photo: Jason South

"The point is, on the face of it, anyone with an interest in what is going on here cannot tell whether employees are being paid correctly," he said.

Professor Stewart said while the Fair Work decision would allow workers to find out what they were being paid they would be bound by confidentiality from discussing it.

That could include with their lawyer or other unions. "If employees reveal information about the agreement they are breaching the agreement."

Retail and Fast Food Workers Union secretary Josh Cullinan said information on the Fair Work file – that was not redacted – indicated workers would be paid considerably less than in an ordinary Woolworths supermarket.

"We have yet again exposed another outrageous secret deal between Woolworths and SDA. We have never seen a deal where the wage rates are kept secret," he said.

Mr Cullinan said documents on file indicate workers in the "dark stores" would be paid about $1.50 an hour less than in an ordinary supermarket. That could cost a full-time worker about $3000 a year.

"No doubt Woolworths has committed to recruiting these workers to the SDA just as they have recruited supermarket workers to the SDA for years."

An SDA spokesman said pay rates were provided to workers before they voted on it – although this appears to be untrue.

New, or greenfields agreements, are between a union and an employer and do not involve a vote of employees. Woolworths has said it was unable to finalise hiring the 400 workers until the agreement was approved, which only occurred on December 8.

There is no record on the Fair Work file of a vote having occurred. The spokesman did not respond to further requests for comment about the "vote". He said keeping the wages detail confidential was "not the SDA's preference".

The deal provided hourly wage rates that were higher than the award and penalty rates that were "consistent" with it, the SDA spokesman said. He did not disclose what those pay rates were.

"The difference with the supermarkets' base rate arises because the supermarket EBA has a higher loaded rate but a different penalty rate structure."

The Fair Work Commission, which has been criticised for approving numerous questionable deals involving big business and the SDA, declined to comment on its decision.

A Woolworths spokeswoman declined to answer questions on why it had asked for the wages information to be confidential or if the workers were paid less than workers in its other supermarkets.

The spokeswoman said the deal paid award penalty rates and a higher hourly base pay, but did not disclose what that pay rate was.

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