How shelf stacker Penny Vickers took down Coles

The Australian, November 9, 2017

Incredible as it might seem, Coles shelf stacker Penny Vickers and her father have taken an enormous step in dismantling the industrial structures that dominate so many of our industries.

Firstly, the Vickers case has shown that enterprise agreements are dangerous if they do not benefit all workers and this has triggered a rush to end such agreements, which is alarming the ACTU.

But secondly and, perhaps more importantly, it has blasted another major hole in Australia’s big employer — big union arrangements. And that hole was blasted not via new legislation but via the judicial process.

Whether it be transport, commercial building, food franchising or retail, our country has, for the past few decades, been organised via close relations between large companies and unions. Those arrangements usually make it harder for smaller or non-union enterprises to compete.

Strangely, in the process, many unions have been transformed into businesses and their business model funds the ALP and the Greens and is at the core of how the ACTU works.

Understandably the ACTU is fighting back to try and restore the ”good times” and the Streets ice cream bans are part of that fightback. More of that later. Back in July 2016, I yarned with Penny Vickers, who is a Brisbane mother of two who does her shelf stacking at night. She was clearly very talented but her father, Allen Truslove, who is one of Australia’s sharpest actuarial minds, also advised her. (He was Acting Victorian Government Statist and Actuary before being head hunted to serve as Chairman of the Nominal Defendant Investment Board of the Queensland State Actuary & Insurance Commissioner.) They were a formidable combination.

Vickers and Truslove had a very straight forward aim — to end the enterprise bargaining deal between the all the big retailers (Coles was the focus of the case) and the Shop Distributive & Allied Employees Association. That deal saw workers at weekend being paid below the award although those working Monday to Friday were paid slightly above the award. When Vickers and Truslove took up the baton, the 2014 Coles agreement had been overturned and Coles had reverted to its 2011 agreement, which was then challenged by Vickers and Truslove.

Coles has now caved in and most of the big retailers who are part of the union-employer arrangement will now pay new Monday to Friday workers and all weekend workers at award rates. In Coles’ case, the old Monday to Friday rates are grandfathered and there are some other sweeteners.

But in many ways that is the minor aspect of the story. Part of the union deal with the retailers was that most retail workers would be members of the union. And so when employees signed up to work with a big retailer, the form that deducted union dues from their pay was usually among the package of worker recruitment papers to be signed.

Given the hundreds of thousands of people employed by the big retailers, the retail union became one of the most powerful in the land and was an enormous donor to the ALP.

But now the weekend workers know they were dudded in the deal and new workers Monday to Friday will know there is a difference between them and longer serving employees. Will they join the union? I doubt it. The ALP is set to lose a huge funder and the link between big retailers and the Shop Distributive & Allied Employees Association will be drastically changed.

Meanwhile, small retail labour rates are again competitive. Among the majors, Aldi — which refused to unionise its workplace so was not allowed to have the lower weekend rates — has always operated under the basic award but adapted its labour force to be more productive.

The big retailers no longer have the benefit of lower paid weekend work so will now look at their employment models carefully.

At the same time, both Coles and Woolworths are pushing the major suppliers, like Streets, to lower prices. To comply, Streets must end the work practice provisions in its enterprise agreement so it wants to set it aside. Large numbers of other employers are doing the same thing. The ACTU can see enterprise agreements, which are essential to its business model, going out the door so it is trying to teach the employers a lesson via a Streets ice cream union ban. It’s a strange twist to the Vickers-Truslove action

In different forms, the links between employers and unions that we see in retail are duplicated in road transport but sometimes the links go further and we found Toll paying the union to spy on its competitors. And a big company-big union friendly body, the so called Road Safety Remuneration Tribunal, tried to eliminate small truckies to favour big trucking firms. Strong journalism then government action helped block it.

And legislation is the tool being used to block the agreements in the commercial building industry

In commercial building, the CFMEU and other big building unions effectively approve who can be a sub contractor and small and large companies often have to pay the union to be approved. A vast array of work practices in the enterprise agreements also explode costs. But the bottom line is that the big builders have found a way to eliminate competition via the industrial relations laws. Industry Minister Michaelia Cash and the Federal government are trying change that.

If the new building industry laws stay in place (there maybe a change of government) then another huge source of ALP funding will be blocked and the old model will be further weakened. Paradoxically, the CFMEU is not a fan of most Green causes but it pays the Greens large sums so they will vote to keep/restore the building cartels

Unions have become businesses and this is underlined by the fact that both the unions and employer groups do well out of many industry superannuation funds. In many unions, membership fees are less important than revenue from non-member sources including superannuation and employer contributions

But that part of the union-employer joint business model is also under threat. Again, if Malcolm Turnbull stays in power, Michaelia Cash holds her job and the cross benchers vote to reduce buildings costs then most of the employer-union cartels will be trashed by 2019.

If Turnbull loses power, the Michaelia Cash changes will have been too recent so an ALP government will be able to work to restore the cartel model given that the party and the union movement along with participating employers are huge beneficiaries.

But Australia pays a huge price for the employer-union cartels because they boost costs, particularly in hospital, road and school construction.