WoolWorths: THE FRESH FOOLED PEOPLE
A new report from HR Nicholls has found that Australia’s industrial relations system is so complex that employers can overpay their workers and still be found to have underpaid them.
The report, Woolworths: The Fresh Fooled People, examines the high-profile wage case involving Woolworths and Coles and argues this is not simply a story of corporate non-compliance, but evidence of a deeper systemic failure in Australia’s modern award system.
The report examines the General Retail Industry Award (GRIA) and has found that across 119 pages, it details 8 employee classifications, 3 different types of employment and 1,424 separate rates of pay across roughly 26,000 words.
“This is a system where the court has ruled you can pay your staff more than they are entitled to and still be found guilty of underpaying them” said James Mathias, Executive Director of HR Nicholls. “The General Retail Industry Award is a wage system that would struggle to pay itself correctly and where intent is rendered irrelevant.”
The report highlights how employers must calculate pay entitlements on a week-by-week basis, with no ability to average or offset payments across time through increased above award salaries which is a requirement that clashes with the widespread use of annualised salaried arrangements and set-off clauses.
“If two of Australia’s largest and most sophisticated employers and the regulator can’t understand how to interpret and comply with this system, then what chance does a small business have?” Said Mr Mathias. “This report is not a defence of Woolworths and Coles. It is an indictment of a regime where compliance has become indistinguishable from error.”
Adding to the administrative burden of the more than 1,400 pay scales are complex allowances that to comply with perfectly, Woolworths and Coles would need to seriously consider having workers wear tracking devices in the future so that they can perfectly comply with the GRIA.
“To comply perfectly, an employer may need to track not just when someone works, but what they are doing at every minute of the day and the temperature of where they are standing,” said Mr Mathias.
A chilling example of complexity in these allowances, detailed in the report, is the cold work allowance, a minor payment triggered by an undefined amount of time spent in refrigerated areas.
Mr Mathias said “The cold work allowance set at 37 cents and hour, or 56 cents if working below zero degrees centigrade, illiterates the absurdity perfectly. To comply as the law now demands, supermarkets would in theory need to track exactly when each employee enters the cool room, how long they stay, and the temperature at the time.”
As is so common in Australia, Woolworths and Coles are now subject to a speculative class action as well as proceedings brought by the Fair Work Ombudsman. As the case progressed, we learnt that the law firm involved, Adero Law, sought to have the action ended with only their legal fees paid in addition to just a handful of class members receiving any money at all. The Federal Court, to its credit, refused to approve such a deal.
Woolworths: The Fresh Fooled People is the first paper in HR Nicholls new series – Case Dismissed: A Verdict Against Australia’s Industrial Maze. Over the coming year the series will examine the productivity costs of Australia’s award system and other IR frameworks and propose a substantive reform agenda.
ENDS
Media Contact:
James Mathias
Executive Director, HR Nicholls
james.mathias@hrnicholls.com.au
0418 858 925
