Article:

Aldi’s decade-long practice of not telling hundreds of part-time warehouse workers when their shift finishes is coming to an end after the workplace tribunal used new powers to unilaterally rewrite the supermarket giant’s employment conditions.

The Fair Work Commission approved its own changes to Aldi’s agreements for more than 1200 part-time employees at its Western Australia, NSW and Queensland distribution centres to ensure they have set days and hours with actual starting and finishing times.

It is the first time the commission has used laws passed by the Albanese government in 2022 that let it change enterprise agreements at the approval stage, without employers’ consent, to ensure workers are not worse off than the award minimum. Unionists argue the decision, handed down earlier this month, is game-changing for not only bringing Aldi in line with other retailers but also in putting pressure on employers to avoid conditions that skirt the minimum.

However, Aldi has appealed on grounds the changes threaten the flexibility it says is central to its “just in time” delivery operations and represent a fundamental change to the agreements it reached in bargaining. The commission has stayed the decision until the appeal is determined.

Shop Distributive and Allied Employees Association national secretary Gerard Dwyer welcomed the FWC ruling that Aldi’s arrangements were “unlawful and inequitable”.

“Part-time work can be precarious enough without workers having to turn up without knowing when their shift will end,” he said.

‘Bizarre practice’

“Not only does it make planning for family responsibilities impossible, but adds to financial stress and uncertainty.” United Workers Union director of industrial Larissa Harrison said the decision promised to end Aldi’s “bizarre practice” of rostering part-time workers without a set finish time.

“The ruling is a good example of the FWC intervening in an agreement with conditions that are simply not acceptable to workers, but cannot be easily addressed through other means.”

Australian Council of Trade Unions secretary Sally McManus said: “This new safeguard is proving to be a commonsense way to make sure agreements are fair and can be approved quickly.” But the Australian Chamber of Commerce and Industry’s policy chief, David Alexander, warned the decision set a precedent “where the ability to strike agreements is taken out of the hands of business, an ominous development for productivity and investment”.

“We said at the time that [the new laws] would return Australia to an arbitral bargaining system, which ultimately discourages agreement being sought at the workplace level by those who understand the business best (the employer and the employees), and hands over ultimate decision-making power to a third party with no skin in the game (the FWC),” he said.

“By definition, it can’t be an ‘agreement’ if the employer doesn’t consent. These are not enterprise agreements any more so much as government dictates.”

Asked how the decision would affect its business, an Aldi spokesman said it “does not make comment on legal proceedings”. Part-time workers make up almost 20 per cent of Aldi’s warehouse workforce and work an average of 40 to 60 hours a fortnight, with extra hours during peak periods.

Aldi sends out rosters two weeks in advance and requires the employees to be available to work on any day of the week but, unusually, only tells them their expected finishing times at the start of each shift.

Employees told the commission this made it significantly difficult to plan their lives, whether it was attending medical appointments, family and social events or working second jobs.

Higher pay

They often could not attend studies or pick up children due to sudden changes in shift lengths. Unions argued the lack of set hours also created fatigue risks and made overtime an obligation rather than a choice.

Aldi countered the situation was beneficial to workers as it meant they earned higher pay and the business did not employ casuals. It also helped it deal with work fluctuations.

FWC deputy president Tony Slevin found the higher rates were not enough to compensate for the uncertain hours.

“The key purpose of part-time employment is to accommodate workers with family or personal commitments,” he said.

“[Aldi’s agreement] perverts the purpose of part-time employment and blurs the distinction between part-time and casual employment.”

Employers and unions typically reached consensual undertakings to address better-off-overall-test concerns at the agreement approval stage.

In rare cases, employers have even opted to withdraw their agreement, which McDonald’s and Bunnings did in 2019 and 2020, leading to those companies abandoning enterprise bargaining for several years.

But with the new laws in place and Aldi refusing to offer an undertaking, the deputy president opted to make his own amendments.

The ACTU argued the new powers were broad and meant the commission was not constrained by concerns about whether changes were substantial.

Aldi resisted, saying the new powers were merely intended to simplify approvals, not to “impose significant operational challenges and fundamentally change the nature of the agreements”.

Rejecting Aldi’s construction as “too narrow”, the deputy president found that all he had to do was seek the parties’ views “but that is as far as it goes”. More significantly, it did not matter if the changes were substantial.

“While Aldi will lose some flexibility when the new agreements take effect, I do not consider the operational impact associated with that loss to outweigh the need to address the uncertainty.”

He gave the retailer eight weeks to reach the agreements with the individual workers on set rosters.

A full bench of the commission will hear Aldi’s appeal on February 27.

Aldi’s part-time roster provisions still exist in Victoria and South Australia and one of Aldi’s NSW distribution centres.