Make Labor pay for union collusion with Coles and Woolworths

The Australian, October 14, 2017 – Grace Collier

Before the federal election last year, Malcolm Turnbull was famously silent on the questionable methods of Bill Shorten during the latter’s days as a union leader. During the campaign, I sent a text to a senior strategist inquiring why the Prime Minister wasn’t making use of the lethal weapons lying at his feet. The response was astounding: that he didn’t need to throw rocks at a dead man.

That “dead man” wasn’t so dead after all, it turned out. For a dead man, the Opposition Leader did pretty well: he nearly won the election, missing it by one seat. For a dead man, he sure looks alive enough to become our next prime minister.

Time and again, Coalition types lack the nerve, the killer instinct. In political battle, they lack the efficient brutality of Labor. Instead of blowing their enemies to smithereens, they prance towards them, wag a finger and administer a nipple tweak or two.

The only time this does not apply is when the Coalition attacks its base.

When they do decide to be brutal, it is towards donors or loyal supporters. The government has shown a merry willingness to take its own people into the town square and flog them in public.

This is regrettable behaviour, the mark of cowardice and a trait that needs to change. If the Coalition were so inclined, it could focus on its real enemies and blast Labor into the stratosphere.

This year, the Senate held an inquiry into claims that cosy agreements struck between some corporations and unions were facilitating widespread wage theft by paying below-award rates to hundreds of thousands of workers.

The inquiry was held at the instigation of Nick Xenophon and Stirling Griff.

The Senate committee that conducted the inquiry received 26 submissions, held a public hearing in Melbourne and recently released its findings. The committee was Labor dominated, unfortunately, so the report is a whitewash, designed to protect the party’s union masters. The only recommendation is to “overturn the Fair Work Commission’s decision to reduce Sunday penalty rates”, a solution to a problem the inquiry was not focused on.

The report says nothing meaningful about the dodgy deals, how to prevent them in future and provide redress to the victims.

Instead, it claims to be “disappointed by what can only be described as a frenzied attack on unions by Coalition and Greens senators acting seemingly in unison”.

The committee’s non-Labor members offer their own advice and comments, including a dissenting report from Coalition senators, which is where the government needs to look.

It says, “As this inquiry has exposed, for many years unions have signed enterprise agreements with large enterprises that include cuts to Sunday penalty rates” and “small businesses have been on an uneven playing field relative to large businesses”. Some of the examples cited are:

  • A bed and breakfast has needed to pay about $10 an hour more than a five-star hotel.
  • A takeaway shop has needed to pay about $8 an hour more than KFC, McDonald’s or Pizza Hut.
  • A specialty food shop has needed to pay about $5 an hour more than Woolworths or Coles.

Labor’s main defence of these deals is that any losses are offset by a higher base rate of pay. Coalition senators demolish this in the report, calling it the “feeble ‘rolled up’ rate difference”. “Evidence from a number of people who work for large retailers” suggests “they were worse off … (and) not informed — either by the company or the union — that their agreement included penalty rates that were lower than the award”.

They add: “This inquiry showed that unions appear happy to trade away penalty rates in enterprise agreements, clearly because these arrangements suit union leaders, as opposed to workers … through union membership, union dues and superannuation contributions paid by default into union-aligned industry superannuation funds.”

The committee also learned that the Shop, Distributive and Allied Workers Association had been paying 10 per cent of union dues, deducted from people’s pay, to Coles and Woolworths. Although this is allegedly going to change now, “These payments are yet another indicative example of the cosy relationships between big unions and big businesses.” And, finally, “the SDA is the ALP’s largest union affiliate”. Widespread wage theft is funding the ALP.

The Greens say in the report, “the only collusion we can discern is between Labor, SDA and big corporations” who are “working in unison to deny young workers their penalty rates”. It is “a scandal” and “cannot be allowed to continue”.

They calculate that, “extrapolated over six years, Woolworths has collected up to $12 million of their employees’ union fees” and “Coles has collected up to $10.2m of their employees’ union fees”.

Further, “the full extent of the underpayment remains unknown” and “a royal commission into underpayment of penalty rates and other wage theft” should be established “to fully investigate the extent of wage theft and below-award payment” and recommend appropriate compensation.

That would be a pretty big bomb to drop on Labor, and it is the perfect time to do it. It would be the right thing to do.

After all, our industrial relations system must be fully transparent, fairly administered, corruption free and not used to undermine competition and distort the free market.