Nick Grimm: Supermarket giant Woolworths has won the day in a fair work hearing against the United Workers Union. Strike action by 1,500 Woolworths distribution hub workers has dragged on for more than two weeks, throwing the retailer's supply chain into chaos. But today, the Fair Work Commission ruled the strikes have been unfairly disrupting ongoing negotiations over pay and conditions for employees. Our business reporter, David Taylor, has more.
David Taylor: Around 1,500 people had formed picket lines outside Woolworths Melbourne South Regional Distribution Centre, as well as three other sites in Victoria and New South Wales.Strike action now in its third week has left a number of stores in Melbourne without toilet paper and frozen food. Workers want more pay and better working conditions and say the artificial intelligence used to monitor their performance is inhumane. University of Sydney Business School Professor John Buchanan.
John Buchanan: There's a standoff over both the quantum of the wage increase that is of interest, and you've got to remember in the post-COVID environment, inflation spiked using the CPI at 7.8% in December 2022. And if you use a broader measure, the Living Cost Index, which factors in housing costs, it's spiked at 9.3%. Wages have not kept up with that. And no matter which way you cut the data, Australian workers are at best 5% or 6% down in real earnings. And for people who haven't had a decent wage increase for a while, some workers are down 10% or 15%. So that's the first big issue. The second issue, as I understand it in this dispute, is around the use of AI and data science in the management of the workforce.
David Taylor: Analysts say it's been costing Woolworths millions of dollars a day in extra costs and loss of sales. So it turned to the Fair Work Commission for help. Woolworths Group filed an urgent application with the Fair Work Commission earlier this week, and the case was heard today.
John Buchanan: What we're witnessing now is that as unions have become more effective, as they've been able to take more effective industrial action, employers are getting a bit annoyed. And so they're now saying, well, we don't want enterprise bargaining anymore. We want to go back to the Industrial Relations Commission and shut the dispute down.
David Taylor: The application to Fair Work alleged a breach of the good faith bargaining requirements in the Fair Work Act. In other words, talks between Woolworths and workers over pay aren't working, and it's left both sides struggling to find clear air. Woolworths sought orders to prevent the United Workers Union from blocking access to sites for non-union workers and vehicles looking to offload supplies. AMP's head of investment strategy, Shane Oliver, says at its heart, there's a tug of war between workers and investors for a share of Woolworths profits.
Shane Oliver: So it's part of the so-called cost of living crisis. It's reflected in the GDP numbers or the so-called per capita recession. It's reflected in falling real household incomes. So it's part and parcel of that. Workers feel that they've been left behind and that their pay doesn't buy as much as it used to a few years ago. Yes, wages growth has picked up, but not enough to make up the gap yet.
David Taylor: The news headlines say that it's workers versus Woolworths, but is this actually really workers trying to influence Woolworths management at the expense of investors?
Shane Oliver: Well there's an element of that. It's not simply workers versus Woolworths. It will impact investors and it will also impact Woolworths customers.
David Taylor: But Woolworths make enough money in order to meet the workers' demands. So, but Woolworths have shareholders to consider as well.
Shane Oliver: They do. Woolworths makes a profit. It's a business. It runs a profit and you could cut into that profit. But of course, if you cut into the profits, then you get less for shareholders and the share price goes down. Alternatively, you could just pass the wage increases on to customers, but that makes the customers worse off. So it's the classic three-way battle.
David Taylor: Well, this afternoon, the Fair Work Commission found the union has been unfairly negotiating with the supermarket giant. Woolworths successfully argued to the commission that picketing outside its sites was impacting on good faith bargaining requirements. But legal experts say any order is likely to be appealed.
Nick Grimm: David Taylor reporting.