The shop assistant union's decision to end its 30-year practice of trading off penalty rates for higher base rates of pay is an "overreaction" and could bring an end to enterprise bargaining in retail and fast-food sectors, business groups have warned.
The Shop Distributive Allied Employees Association announced the dramatic about-face in a letter to union national secretaries on Monday, when it said the Fair Work Commission's decision to quash its Coles agreement "effectively ended the process of 'rolling up' rates across the workforce". That was because the decision "requires that the position of every single worker be better off [than the award] at every single hour under an agreement".
SDA national secretary Gerard Dwyer said it had now reviewed almost 100 agreements and found the "new" better off overall test in the Coles decision meant "a number" of approved agreements could be subject to challenge.
He said the union national executive would now renegotiate expired retail and fast-food agreements to meet the new test and threatened to terminate them if employers refused to bargain.
"Inevitably we think this will require revisions of weekend remuneration – either through higher penalty rates or even higher base rates of pay and the interaction of those rates with rostering principles," Mr Dwyer said.
Some major franchises and businesses are understood to rely on long-expired SDA agreements that allow them to pay below award rates.
More scrutiny
Domino's staff are covered by an SDA agreement that expired in 2013 and Coles workers have fallen back onto an expired 2011 union deal.
Australian Industry Group chief executive Innes Willox said if the SDA's intention was to no longer negotiate rolled-up rates this was "an overreaction" to the Coles decision.
"Such a change of position would disadvantage workers, businesses and the broader community. It is in no one's interests for flexible work arrangements which benefit all parties to be dispensed with."
While the Coles decision would "perhaps lead to a little more scrutiny" of rolled-up rates, Mr Willox said "this is no reason to abandon a mutually beneficial approach".
Steve Champion, managing director of consultancy ER Strategies, said an end to loaded rates in retail, restaurants and fast food would be "almost the end of enterprise bargaining in those sectors".
While a major benefit of enterprise agreements was preventing industrial action in their "nominal" term, Mr Champion said the less militant workforces in these services sectors would leave employers with "little motivation" to reach a deal with unions without loaded rates, which he said significantly simplified rostering and payroll.
He said retail, restaurants and fast-food had effectively been on "hiatus" since the Coles decision, caught between the lack of definitive statement about the commission's new approach and its impending decision on whether to cut penalty rates, expected next month.
