Promising more exposures of EBA’s verging on dodgy deals

The Australian, April 1, 2017, Grace Collier:

Threatening people is unwise; most threats are hot air, driven by emotion, rarely carried out. That is why I never make them. When I intend to do something, I determine whether it is best to let the party on the receiving end know or to spring it on them without warning.

Last week this column focused on an enterprise bargaining agreement made between three companies (franchisees of Kentucky Fried Chicken) and a union (the Shop Distributive & Allied Employees Association) in 2010. The EBA prescribes wages at below-award rates as well as seemingly imposing compulsory unionism on workers.

The column ended with a message to corporations: “Correct your ways pronto, because even if the government doesn’t come after you, I will.” The last three words were not a threat. They were a promise.

When looking at EBAs, it’s important to bear in mind that such agreements represent the legal minimum requirement. Employers are free to pay more if they wish. In response to last week’s column, KFC wrote in to say its workers are paid 9 per cent more than the EBA says, by virtue of a side agreement with the union.

It declined to answer whether this agreement is in writing, whether these payments have been delivered or are just pledged, and whether they apply to all KFC workers.

Let’s accept that KFC workers are paid 9 per cent more because their employers kindly are choosing to do so. Even then, that is hardly the point. The point is that EBAs such as this should not be made.

The Fair Work Commission should not be letting these EBAs through, but it has been. The government should appoint someone to conduct an inquiry into the matter, but it won’t.

This column will expose as many dodgy EBAs as I can find. Commissioners who have approved them and company managers who sign them will be named. This will continue for as long as required. It is past time that our workplace relations culture is cleaned up. The IR club — made up of big business, employer groups, lawyers, big unions — needs to be demolished.

This brings us to our latest case study. The EBA in question today is KFC National Enterprise Agreement 2009 (AG2009/14188). This is KFC’s corporate EBA. It is made with the SDA and “Kentucky Fried Chicken Pty Limited, as well as its subsidiaries and the franchisees and their associated companies operating food outlets (other than Pizza Hut food outlets) listed in the attached Schedule A” — listing 49 companies. It was signed by a KFC representative (signature illegible) on November 12, 2009, in the dying days of the Work Choices bridging period. Fair Work commissioner Francis Raffaelli approved it.

The EBA contains no penalty rates for nights and weekends. Employees are entitled only to the award base rate, around the clock, for a long working week.

A 15-year-old employee can be worked up to 11 hours a day, for up to 44 hours in a week, without overtime. Work is performed during any 24 hours of the day, on any day of the week, for a junior rate of $7.77 an hour. Keep in mind, KFC says it voluntarily pays 9 per cent more ($8.46).

All new hires must be given a copy of KFC’s policy, which is that all employees “shall join the union” and the employer “undertakes to positively promote union membership by recommending that all employees join”. The employer must give them an application form and on authorisation take the money out of their pay and send it to the union at the beginning of each month. Superannuation contributions go into the SDA fund.

It is widely understood you cannot make an EBA to cover a company that doesn’t exist. Yet incredibly, in 2013 this EBA had its coverage extended to all future KFC franchises. KFC employs 34,000 people and it seems its business is growing.

This EBA will stay in place forever until terminated by the commission or replaced by KFC, with a vote of the employees.

This EBA means that if a person starts a new KFC franchise tomorrow, they buy the legal right to underpay their workers. On the other hand, if that same person were to start an independent chicken shop, they would have to pay award wages, for a 38-hour week, plus penalties for nights and weekends.

This EBA demonstrates why small businesses can’t compete with the big business-big union alliance. Companies and unions will always make arrangements to benefit each other.

This cartel mentality is entrenched in our corporate culture, woven into our institutions, and its methods are franchised out for profit.

After seeing the EBA, a spokesperson for Employment Minister Michaelia Cash said: “By striking deals with unions, large employers are able to obtain a competitive advantage that simply isn’t available to smaller employers” and “The law very clearly states that individuals should be free to join or not join unions, without pressure either way from an employer or union.”

Concerned parents of KFC employees can write to KFC’s head office, demand termination of the EBA and a refund of their children’s union fees. Any employee of KFC can apply to the commission to have the EBA terminated and all workers returned to the fast food award.

Details of how to do this can be found at: www.fwc.gov.au/documents/documents/agreements/fwa/ae872706.pdf