Cullinan v SDA: no new EA test in Coles full bench ruling

A union industrial officer has rejected claims that the Fair Work Commission (FWC) applied a new expansive interpretation of the Better Off Overall Test (BOOT) in quashing Coles' latest enterprise agreement when it took into account the circumstances of individual workers.

National Tertiary Education Union industrial officer Josh Cullinan, acting independently from the union, argues the FWC had applied the standard test unions had long fought for and accused Coles and the Shop Distributive Allied Employees Association's (SDA) of being the ones seeking to apply a new weaker interpretation

A FWC full bench found the latest Coles-SDA 2014 agreement, which removed penalty rates for a higher base rate and other benefits, left a sample group of casuals and part-timers who worked penalty rate shifts thousands of dollars worse off (WF 03/06/16)

In a June 8 letter to the Australian Council of Trade Unions and union secretaries, SDA national secretary Gerard Dwyer argued the full bench decision was a "significant development" in how the BOOT will be applied in the future.

Dwyer said FWC was "now looking at each and every employee rather than the broader groups or workforces as a whole" and this had "significant implications for bargaining in the services sector as well as other industries".

However, in a June 22 response to Dwyer, Cullinan said the SDA's claim of a new test was "simply wrong". He said the bench applied "the established, orthodox interpretation of the BOOT that has been fought for and maintained by progressive unions over many years".

He said neither Coles nor the SDA had attempted to argue otherwise during hearings and the union's argument only arose after the decision. "[The SDA] is treating its members, and other union officials, as fools," he said.

Under the Fair Work Act s193 the FWC must be satisfied that an agreement leaves "each prospective award-covered employee" better off overall than the award.

However, the Explanatory Memorandum says "it is intended that FWC will generally be able to apply the BOOT to classes of employees" and will not be required to "enquire into each employee's individual circumstances".

Cullinan said the test was so well established that even McDonald's media release defending its EA deal referred to the test for EA approval as being "if each of the employees covered" is better off overall.

Cullinan accuses SDA of backing Coles' bid for a weaker test

Cullinan said SDA had supported Coles' "practical application" of the BOOT that would have "substantially undermined" the existing test - namely by allowing the "intrinsic value of work" to offset lost minimum wages and penalty rates.

As an example he said Coles, with the SDA's support, had argued the full value of all forms of leave (including unpaid leave) had to be assigned to each worker even if they did not access it.

Further, he said Coles and the SDA had argued every worker who suffered domestic violence would have lost their jobs if not for the EA's domestic violence provisions, even though the provisions did not provide for extra leave. He said Coles then sought to place a financial value on those employees not losing their jobs that would offset the lost minimum wages and penalty rates.

SDA claims Coles wage bill 'higher'

The SDA claims the majority of Coles workers are still better off under the 2014 EA and claimed Coles had a "significantly higher" wages bill than under the award.

It said Cullinan's claims that Coles was saving between $50m and $100m a year off the deal "can only be believed" if one ignored "substantial increases in the base rate".

Cullinan said that his cost estimations were extrapolated from the FWC findings involving sample stores chosen by Coles and applied to the 50,000 non-casual staff.

He said the stores chosen by Coles included the smallest store in Melbourne, with the narrowest opening hours and below average numbers of non-casual staff.

Even then, the FWC found 31 of 49 non-casual staff at that store were worse off by more than $1,500 a year each.

He said the SDA had not argued Coles' wage bill was higher than under the award and produced evidence to prove that.

But even if it was the case, he questioned why "half the workforce, tens of thousands of workers, lose millions for the benefit of others?"

He pointed to the FWC hearing transcript where a SDA industrial officer admitted the union had not informed the relevant workers at the time of the EA ballot that they would be worse off, even though he "imagined" the union was aware of the fact at the time.

Cullinan claims SDA actions contrary to 'working class'

Dwyer concluded in his letter that the Coles case was "also a reminder that politically-motivated interventions in the workings of a union can have flow-on consequences that are unforeseen and against the interest of our movement and our members".

Cullinan countered that "the union movement risks real damage unless SDA is held to account for its actions, which are contrary to the efforts of all progressive unions and the working class".

Dwyer did not respond to Workforce questions about whether the SDA had supported Coles in seeking a 'weaker' BOOT.

Instead Dwyer said in a general statement that it will "now enter all negotiations in the future with the knowledge that [the BOOT in the Coles decision] is the new benchmark".