Fair Work judgment must kill cosy IR club for good


Grace Collier

A wrecking ball just smashed through the front doors of Australia’s industrial relations club. A momentous legal decision has tipped shame on the industrial relations team at Coles, shame on the Shop, Distributive and Allied Employees’ Association, and shame on the Fair Work Commission too.

Congratulations to Duncan Hart. An unlikely hero for some, he has done this country a great favour. After this, everything must change. The dodgy deals must stop. The IR club must be demolished. The same industrial relations rules must apply to all businesses, great or small.

Coles is the new Cleanevent. A legal decision proves it. Its enterprise agreement has been struck out because it rips off its lowest-paid workers. What a shame the recent royal commission into union governance didn’t look into the SDA and the current deals it has with employers such as Coles.

Cleanevent was a cleaning company that many years ago paid the Australian Workers Union $25,000 as part of a deal for an EBA. This EBA allowed the company to underpay its workers by $400 million. The Dyson Heydon royal commission into trade union governance examined the deal in detail.

Subsequently, recommendations were made to stop “corrupting payments” between employers and unions. If those recommendations were legislated now, Coles executives might be facing prosecution, because Coles has admitted it paid the SDA $25,000 a year for “training”.

We all know that penalty rates impose a cost on business operations. What is less understood is how in some sectors only smaller businesses have to pay them, because bigger businesses can do dodgy deals to avoid them.

Provided a business has a large workforce, is prepared to push its workers into union membership, and perhaps even pay the union money, an EBA with below legal pay rates can be secured.

These EBAs should not get registered by the Fair Work Commission, but unfortunately, if an EBA has union sanction, it just gets waved through. With a wink and a nudge, the members of the IR club look after their own.

For the SDA, this decision is devastating. There are other employers that have signed up to its dodgy EBAs. What if these employers dump the union, stop pushing their staff to join, and stop supporting the union financially? The only thing this union has going for it is its partnership with key employers in the corporate sector.

This decision is embarrassing for the Labor Party. How can it campaign on penalty rates when a major backer makes a living by selectively undercutting them? There are a few unions in this country whose core business is to sell cut-price wage deals. How can the party of the workers live with this association?

The FWC, too, needs to review the way it approves agreements. Scrutiny is applied to EBAs with no union involvement, but those with a union seal are simply rubber-stamped. There has always been an assumption that a union has the best interests of workers at heart and can be trusted with their pay cheques. This assumption is no longer true and everyone needs to adjust their thinking accordingly.