In truth, Clohesy was paid less than the legal award rate. She got no penalties, and took home just $147 for an 18-hour week. These wages were the result of a workplace deal McDonald’s struck with blokes she’d never heard of: officials of the Shop, Distributive & Allied Employees Association (SDA), the union that was supposed to fight for workers like her – the “Shoppies”.

The letter continued a long SDA tradition of dogged campaigning against liberal reform, from abortion to IVF, gay rights to stem-cell research.

Donnelly’s timing was awful. It was the middle of a federal election campaign and Bill Shorten was capitalising on the surging public support for marriage equality. When party officials heard of Donnelly’s missive they were alarmed; if the letter had been leaked, it would have exposed damaging internal tensions on gay marriage.

Only days before, the SDA, Australia’s largest private-sector union, had received a rare rebuke from Shorten on another issue. The Labor leader had been campaigning on protecting penalty rates, and was frustrated by stories about a deal between the SDA and supermarket giant Coles that had slashed penalties and left tens of thousands workers out of pocket.

News of the Coles deal was just the first in a string of revelations about SDA-negotiated workplace agreements that deny Australia’s lowest-paid workers hundreds of millions of dollars a year. Dozens of agreements across the retail and fast food sectors are now under scrutiny, including those with Australia’s three biggest employers: Woolworths, McDonald’s and Coles.

The agreements set pay and conditions for employees who work unsociable hours stacking shelves, cleaning floors and taking orders – jobs that keep the 24/7 retail economy ticking. At Coles, workers are nearly 60 per cent female, mostly part-time and casual, on average pay of $28,500, according to data from two stores. The McDonald’s workforce skews even younger and the pay is much lower. At one Sydney store, average pay was just $15.46 an hour, the average worker just 18.

The SDA didn’t intend to end up in the headlines. Secretive, authoritarian and suspicious of the media, it has kept itself and its industrial method out of the limelight for decades. Its leaders’ discipline and resilience are legendary.

Former ACTU secretary Bill Kelty says of them:

The SDA was a major contributor to the ACTU campaign against the Coalition’s WorkChoices policy, a key factor in the 2007 ousting of the Howard government. But the revelations of a widespread wage rip-off are threatening to undermine the union’s standing within the wider labour movement and its relationship with employers, and highlight the chasm between an ageing, male leadership on a moral crusade, and a diverse, mostly female workforce, trying to make ends meet.

The SDA is facing public and internal pressure for change not seen since a group of Cold War warriors seized control of the union more than 60 years ago.

In Melbourne, 28-year-old lay Catholic leader Bob Santamaria watched in horror. At home the communists were also on the move; their party’s membership was 20,000 and rising. Santamaria and his highly influential supporter, the Catholic Archbishop of Melbourne Daniel Mannix, agreed to step up the anti-Red campaign run by the Catholic Social Studies Movement (better known as the “Movement”), later rebadged the National Civic Council (NCC). The war waged locally by the NCC was against communism, but also against modern liberal values. It would dominate Australian politics through the Cold War, trigger the seismic Labor split of 1955 – which helped keep Labor out of power federally until 1972 – and define the post-war SDA.

The war would be fought on uni campuses and in the ABC and the ALP, but during the 1940s and ’50s it was focused on unions controlled or influenced by the communists. The Shoppies’ magazine had once mourned the “great’’ Vladimir Lenin but by the early 1950s the SDA, along with three other prominent unions covering ironworkers, the clerks and carpenters, would be in the grip of the Movement and, soon, out of the ALP.

An important Santamaria strategy was to use the communists’ own tactics against them. Such was his urgency, he wrote in a report to key Catholic bishops in 1944 that the Movement needed a national campaign “modelled completely on the Communist Party” and its organising principles. God’s crusade and knights. Stalin’s methods.

By the late 1980s the Communist menace had receded. The Berlin Wall had fallen, and the four main NCC unions were back in the ALP fold. Union amalgamations gobbled up the ironworkers, clerks, and carpenters. Of the big NCC unions, only the SDA was left standing.

But while the Cold War was almost over, the morality war was alive and well. The mission and methods of the Shoppies remained intact: iron-fisted Catholic control, and close partnerships with big employers that gave it significant political power.

In a timbered boardroom at Melbourne’s Docklands where he has an office in a former warehouse, Bill Kelty is scribbling on a whiteboard. He’s giving Good Weekend a crash course on the SDA and its place in the labour movement, politics and the economy.

In the 1940s and ’50s, the communist credo was to fight the bosses. The NCC or “friendly” unions, as Kelty describes them, worked with employers to keep the communists out. They offered predictable wage outcomes, no strikes and a single voice for a large and dispersed workforce. “[The SDA] is a Catholic union with Catholic connections,” Kelty says. A lot of employers supported it because of that but they also supported it because the SDA was a moderate and friendly union.’’

This is what Kelty’s ACTU successor Greg Combet calls the “partnership’’ model of unionism. A “legitimate’’ model, says Combet, but with an inherent danger. Unions became reliant on employers, weakening their bargaining power. “There was always a risk this would impact outcomes for workers,” says Combet, also a former minister in the Gillard government.

A partnership was formalised with the SDA in 1971 when six major retailers, including Coles and Woolies, signed landmark “closed shop” deals under which companies would sign up their staff as SDA members on the union’s behalf. While convenient for the SDA, the closed shops gave employers a key weapon in all future negotiations – influence over membership, every union’s lifeblood. Later, in Keating-era enterprise bargaining agreements, the SDA’s favoured position would be reconfirmed, but at a price to workers: a cut to penalty rates, opening the way to 24/7 trading, and ever more night and weekend shifts. The greater the number of employees on those shifts, the bigger the savings for employers from further cuts in penalties.

De Bruyn’s Catholicism is absolute but he denies involvement with the NCC – a denial he’s made one way or another for 40 years – and downplays any association with Santamaria.

This is rubbish, says industrial relations barrister Jeffrey Phillips SC, who happily talks of his days as an NCC contemporary of de Bruyn’s at Sydney University and the SDA in the 1970s. Phillips finds the denials quaint but annoying. “He’s like Ian Thorpe a few years ago claiming he was not gay.” He laughs about Cold War-era “paranoia” and intrigue, including letters to and from NCC activists cut vertically in half and sent in separate envelopes so no single communication could be understood if intercepted.

The NCC worked with Australian intelligence in its surveillance of communists for many years. Such was the NCC’s discipline and zeal that ASIO grew concerned that perhaps it was being infiltrated. One confidential report in the National Archives described the NCC as “clandestine”, its members more difficult to identify than those of the Communist Party. Other ASIO reports from 1973 marked “secret” described the NCC as “seeking to penetrate with undeclared members” various targets: unions, government departments and indeed ASIO itself.

“It was cloak and dagger,’’ recalls Phillips with a chuckle. “No one ever admitted they were a member of the NCC; there was a nice little fiction that you didn’t sign a membership form.”

A second ex-NCC operative struggles to see the humour. In a soon-to-be-published critique of the NCC, The Show, former clerks’ union federal secretary John Grenville collaborates with one-time ABC journalist Mark Aarons, whose family were prominent in the Communist Party. Grenville was driven out of the clerks’ union – part of a bitter mid-1970s NCC split – by Santamaria’s long-time union lieutenant, John Maynes. He recalls NCC meetings in the 1970s with Santamaria and de Bruyn. “Joe, you were part of the NCC story. Your union was run by NCC,” he tells Good Weekend.

It turns out that NCC members had membership cards – only not signed.

Documents from Aarons’ NSW State Library collection include copies of membership records for both de Bruyn and his long-time offsider, SDA national assistant secretary Ian Blandthorn.

Joe de Bruyn has not responded to requests for comment since the September 2014 interview. Nor did he for this piece. While today’s NCC is more of a marginal curiosity than a political force, torchbearers like de Bruyn are powerful figures because of their dominance of huge unions such as the SDA.

Brendan Browne is one of a rare breed – a former SDA insider willing to talk about his time there. During a 2002 interview for a job in the union’s membership unit in Melbourne, he was asked a carefully worded question: if he represented the SDA in ALP debates, would he be comfortable opposing an extension of abortion rights? He was later queried about why he and his partner had had a child out of wedlock.

As a Catholic aware of the SDA’s conservative reputation, Browne was not surprised by the questions. But he is unclear about their relevance to the shelf stackers and burger flippers who’d be paying his salary.

The union’s constitution commits it to “safeguarding” members’ interests, including “morally”, “socially” and “intellectually”. Restrictive internal election rules include bans on anyone seeking office if there is “reasonable ground for believing’’ they had advocated the overthrow of the Commonwealth, a State or “any other civilised country’’ in the preceding 12 months.

Joseph Stalin only ran the Soviet Union for three decades. In 36 years, Joe de Bruyn was not once challenged as SDA national secretary. He is now, at 66 years of age, its national president.

Anyone wanting a day off at Maccas has to arrange their own replacement. She did that, with her supervisor’s knowledge. But as her replacement was older, the shift was going to cost the multinational an extra $20 or so. This was grounds for a written warning, one she had to sign, admitting her “error”.

“Then they changed me to casual and didn’t give me a shift for five weeks,” she says. Clohesy’s first job was not working out so well.

In mid-2015, Fairfax Media revealed that tens of thousands of Coles workers were being paid less than the award. The amounts were not massive, $1500 here, $3000 there, but significant for workers on $20,000 or $30,000 a year. For the Coles workers affected, the underpayment figure is substantial, totalling about $70 million a year in lost wages.

The Rudd Government’s Fair Work Act in 2009 specifically requires employees be better off than the award – the wages safety net – under any new agreement. A reduction in penalty rates would need to be more than off-set by an increase in hourly wages. When it was finally checked, it was this key legal test that the most recent Coles/SDA agreement failed.

After an appeal by rank and file SDA member Duncan Hart, the Fair Work Commission full bench confirmed the underpayments in May. The ruling sent a cold chill through the industrial relation scene – employers, the labour movement and the commission – raising the prospect that a string of similar agreements were also probably wrongly approved. “They need to fix it up,’’ Bill Shorten barked when asked about the commission’s decision in June. If only it were that simple.

The Coles agreement is one of dozens of SDA-negotiated deals that industrial relations lawyers now suspect would have failed the “better off” test if they’d been properly assessed by Fair Work. In truth, commissioners rarely check the fine print of such deals when an employer and union have agreed to them. That is because the commissioners assume the union is representing workers’ interests.

Media revelations cascaded: McDonald’s was underpaying its workers at least $50 million a year. Domino’s Pizza workers were missing out on at least $32 million a year in penalties. At Hungry Jack’s, more millions lost, while at Woolworths, Australia’s biggest employer, the underpayment was of a similar scale to Coles.

Many of the deals date back years and, although the amounts lost to workers are incalculable, they are certainly in the billions. The future of all these agreements is now in doubt.

“We are talking just over half a million workers across Australia covered by SDA agreements,’’ says Josh Cullinan, the part-time industrial researcher whose work uncovered the initial Coles underpayments and formed the basis of the appeal to Fair Work.

Cullinan, once a young Catholic activist, is an ALP member and says supermarket workers would be better off without the SDA, a bold challenge to political orthodoxy within the labour movement. “I don’t mourn the SDA being replaced by a smaller union without the same reliance, and closeness, to the big supermarkets and employers,” he says. “There’s only one downside for a scenario which sees a militant but much smaller union in the sector – the river of dollars to the ACTU and ALP paid by the SDA.”

SDA national secretary Gerard Dwyer declined to be interviewed by Good Weekend. In a carefully worded statement, he defended the Coles deal and said Fairfax Media’s “ongoing attack’’ on the SDA showed it had “no interest in or understanding of the history of the Australian labour movement’’.

The Labor split scuttled Santamaria’s scheme, but 60 years on, his protégés in the SDA have made a good fist of realising it. The SDA has grown as a force in the party and ACTU since its reaffiliation to Labor in 1985. Where other private-sector unions have dwindled in size and influence, the Shoppies have maintained a steady 200,000-plus membership. This gives it proportionately more influence in the ACTU, ALP and parliament than at any other time in its history. The SDA is Labor’s single biggest power bloc.

The SDA is an active player in union-ALP factional politics and branch-stacking. The luxury of rare internal elections allows the union to build big war chests. Its wealth makes the union a major Labor patron, able to forge alliances by bankrolling parliamentary candidates and factional friends in other union elections.

The union had a hand in killing off the political aspirations of former Australian Workers’ Union national secretary Paul Howes when it blocked his 2013 bid for a NSW Senate position. Howes attributes his withdrawal from the race in part to the SDA and his support for same-sex marriage.

In the federal sphere, politicians with some link to the SDA, either as former officials or through pre-selection support, include Tony Burke, Kate Ellis, David Feeney, Amanda Rishworth, Nick Champion, Don Farrell, Helen Polley, Jacinta Collins, Chris Ketter, Deborah O’Neill and Catryna Bilyk.

Its influence on Labor and ACTU policy has been profound, most topically in its blocking of moves to make marriage equality a binding party policy. Marriage equality campaigner Rodney Croome told Fairfax Media in 2015 that had Labor voted as a bloc, a same-sex marriage bill tabled in 2012 “would have had a fighting chance of passing both houses”.

And when then PM Julia Gillard surprised Australia with her opposition to same-sex marriage, few Labor insiders doubted that her position was really about SDA support within the party, despite her denials.

The SDA’s numbers give it serious clout on the ACTU. Combet, ACTU secretary from 2000 to 2007, says that long after the Cold War finished, its echo could be heard in ACTU executive meetings. “The social policy concerns of the Catholic Church – abortion, same-sex marriage – were always at the forefront for the SDA … I suppose you could say the SDA played an important role in making sure the ACTU did not take a position on some socially progressive issues.’’

One of them – a former left-wing union chief – has joined the two of us to offer praise, and to caution us. He compliments our “great work” in stories through the last year exposing the underpayment of foreign workers and at Coles. But over the next hour, he delivers an intellectual tour de force about the risks of more headlines about the SDA: yes, the union is flawed, but now the big employers are considering abandoning the Shoppies altogether. We journalists could be contributing to Australia’s de-unionisation.

A weak union is better than no union, he says. Retail workers are still among the best paid in the world, no matter that some are missing out. This, from a man who in the 1970s was an arch-enemy of the NCC.

He is especially concerned that Coles – for more than four decades a key SDA partner – is refusing to say whether it will negotiate with the union in the future. Australian unions, already down to a membership of just 11 per cent in the private sector, could soon be as weak as in the US; more 7-Eleven-style scandals – in which the convenience store chain was found to have systematically underpaid its Australian workers – will result.

Another labour movement luminary, Combet, is also concerned about the impacts of the escalating controversy. While the union’s social values are not his own, he insists the Shoppies are genuinely concerned about social justice and workers in industries notoriously hard to organise. “They believe that retail workers are better off with than without the SDA, and what’s more, they’re right.”

Combet, along with Kelty, stresses the SDA’s Catholic collectivist ethic, pointing to its unquestioning support of ACTU industrial campaigns against the Howard government’s WorkChoices and its union-busting on Australian docks in 1998. The Shoppies tipped in hundreds of thousands of dollars to the formerly communist, and still militant, maritime union. Ideologically speaking, it’s complicated: after all, neo-liberalism, like communism, is a natural enemy of Catholicism.

Originally, Hart saw the Shoppies as quirky. Years later he recognised that “quirkiness” as Catholic fundamentalism. He was especially troubled by an SDA submission to a 2012 Senate inquiry into same-sex marriage in which de Bruyn said marriage was for “procreation’’ and the push to change it was to “emasculate” marriage and “abolish it as an institution”.

He responded with his own submission, explaining the union had not asked members their views. De Bruyn came back with a lengthy tirade, noting he’d never heard of Duncan Hart.

A fortnight later, the ACTU formally supported same-sex marriage for the first time – a direct result of the backdown. Labour elders continue to urge renewal in the SDA for the sake of the union and, more importantly, the wider movement.

Former NCC operative Phillips says the union has been shamed by the underpayment scandal into reviewing its industrial approach and its doctrinaire social agenda. “It was contrary to Catholic doctrine about what to do with the lost sheep, everybody has got to be looked after.” Kelty says the SDA should advocate instead on issues of concern to its young members: higher education fees, penalty rates that allow them to go to university, the environment.

It remains unclear if the SDA’s shift on same-sex marriage is a tactical move, a concession of another battle lost to modernity, or whether the crusade is now at an end. In a written response to Good Weekend’s questions, national secretary Dwyer denied the union’s stance on issues such as abortion or same-sex marriage had affected its core work. “It is absolutely incorrect to link any positions the SDA has taken on social issues within the Labor Party to our industrial agenda. The SDA is proud of our record in representing retail workers – the fact is, Australian retail workers are among the best paid in the world.’’

Stacey Clohesy quit her job at McDonald’s in Laverton after four months. She left, says her dad Colin, out of pride, after her written warning and demotion to casual employment. McDonald’s didn’t even refund the $50 she spent on her uniform, despite this being in its legal agreement with the Shoppies.

“We don’t have a lot of money obviously,’’ says Colin, now sitting in their humble lounge. “We live in a lower working-class area, we struggle to make ends meet. But you can’t do this to us for $8 an hour and expect us to hang in there.’’