Retailers name top areas for IR reform

Retailers will push for changes to strict roster limits, award classifications and the approval test for collective agreements as part of a fresh bout of industrial relations reform talks to restore jobs during the post-pandemic recovery phase.

However, retail unions have rejected claims of complexity and the Retail and Fast Food Workers Union (RAFFWU) warned it was "sharpening our pitchforks" to fight any changes.

Bunnings chief executive Mike Schneider, who this year withdrew the hardware giant's proposed agreement covering 43,000 employees after battling legal requirements for almost a year, said a more "pragmatic and transparent" approach to the Fair Work Act's "better off overall test" (BOOT) was critical in the "new normal" landscape for retail.

"Bargaining has become an endless debate about the BOOT rather than a meaningful discussion about benefits and productivity," he said.

"If we can find a way to simplify award terms relating to things like coverage, penalty rates, rostering – those sort of simplifications create more certainty for a manager in a store thinking about his or her rosters for a week so they can have the team members they need to do the work and doing it in a way that creates a great work-life balance."

Employers have argued the complexity of the BOOT, which requires every individual worker to be better off than the award minimum in different roster scenarios, has been one of the primary reasons for the decline in the bargaining system and is the biggest area for reform flagged for Prime Minister Scott Morrison's IR talks with unions.

Bunnings faced months of union opposition over whether its new agreement left 2 per cent of its workforce rostered on Sundays worse off than the award and its mechanism to reconcile any underpayments after 12 weeks failed to resolve the issue.

Mr Schneider said "the BOOT can use hypothetical rostering scenarios that don't exist anywhere in an organisation and that can be used to show an individual team member can be worse off under a proposed agreement".

"Often we trade away things that could make people better off to avoid the possibility a minority might be worse off."

He argued reforming the BOOT would bring flexible rosters and certainty to pay rises as well as "un-encumber the commission from some of the complexity it's been bound by and allows things to move forward".

The retailer was the latest big employer to exit the bargaining system after McDonald's ditched decades of enterprise agreements last year covering 109,000 employees due to the complexity of the approval requirements.

Top three hotspots in the retail award

Paul Zahra, a former David Jones chief executive and now head of the Australian Retailers Association, said the peak body hoped to fix some of the biggest red tape areas in the award as part of the IR talks.

"This is definitely a significant opportunity to cut up bureaucracy," he said. "If it's more than 70 pages, you know for a start there's an opportunity to simplify. And I think it's more about what you can't do then what you can do and that's the problem."

One of the biggest award issues, he said, was cascading award requirements over when full-time employees must work and have days off.

According to clause 28 of the award, for employers with more than 15 employees, staff must have four-week rosters, cannot work more than six consecutive days, must have two consecutive days off each week, or three consecutive days off in a fortnight, and if they regularly work Sundays they must have three consecutive days off in one week.

"No other service award comes with restrictions like this," Mr Zahra said. "While it's incredibly unfortunate, in some ways it's also unsurprising that some retailers have inadvertently underpaid their salaried full-time managers because it only takes a small deviation from the limitations for substantial overtime to apply."

Strict part-time roster restrictions were also discouraging permanent employment and encouraging use of casuals, he said.

Under the award, retailers need to agree to days of work, hours each day, start and finish times and meal break times and can't vary this without a written agreement. Any extra hours outside of the agreed roster attract overtime penalties.

Unions are concerned removing this condition risks casualising part-time work, but Mr Zahra said the requirements enforced a bureaucracy that was beyond small businesses.

"This involves a high level of administration as well as record retention. So larger retailers may well have systems in place to achieve this but it's something small retailers struggle to do, so they simply avoid employing part-timers. It's just too difficult."

If a business did employ part-timers, Mr Zahra said the extra hours were usually offered to casuals due to the lack of administration requirements.

Retailers were also stuck with a complex eight-level classification structure that Mr Zahra said did not identify any qualification or experience that would differentiate a sales person from a senior sales person.

"This is why we need to get legal advice to do basic rostering," he said. "The complexity is so great that even the person listening can misunderstand what you’re saying because there’s so much to get your head around."

However, Gerard Dwyer, national secretary of the Shop Distributive and Allied Employees Association, said "the case for complexity in the retail award has not been made in the past eight years of constant review before the Fair Work Commission".

"Opportunism should not be enlisted in the absence of credible and demonstrable evidence," he said.

Penalty rates target

RAFFWU, which has few members but was responsible for a ruling that effectively overturned trade-offs of penalty rates and ushered forth a strict approach to the BOOT, dismissed employer concerns as really all about the agreement test.

"Really what this is targeting is the billions of dollars [in penalty rates] that we have returned to workers in retail and fast food," RAFFWU secretary Josh Cullinan said.

"There's no real point in having much of a discussion on this front. We just need to sharpen our pitchforks and prepare for the fight ahead."

He argued the issues employers complained about only affected the retail and fast-food sector and the construction sector, where RAFFWU and the Construction, Forestry, Maritime, Mining and Energy Union were opposing agreements that "ripped off workers" or enforcing the award minimum.

"You just don't have this debate in any other sector because there the BOOT is against wages that are 25, 30 or 80 per cent higher than the award."