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BUSM1080 Assessment 1: Individual Essay Total words: 1402 As one of Australia’s largest supermarket chains, the Woolworths Group Limited is the second leading company by revenue in the country. Woolworths operates across 995 Australian stores, employing around 115,000 team members in stores, distribution centres and support offices. In recent years, Woolworths has been the subject of scandal for underpaying their staff as much as $390 million. Sources suggest that deals between the company and the Shop, Distributive & Allied Employees Association (SDA) misled the Fair Work Commission resulting in the underpayments. This essay intends on analysing the underpayments at Woolworths, highlighting their proactive and reactive employment relations policies and providing union and non-union recommendations for addressing any issue where employees’ entitlements have been compromised. This information should demonstrate how to approach colleagues, the union and management in crisis situations, to create and maintain a positive relationship with its employees. Consistent with the pluralist perspective, conditions for socially responsible management must be empirically-driven, considering the success of business interconnectedness.

Woolworths has demonstrated both proactive and reactive business behaviour, both changing to evolve with contemporary management and in response to public confrontation. As a leading business in the supermarket industry, they are responsible for upholding relevant policies. Workers on Australian farms have been paid as little as $8 AUD per hour as opposed to the minimum wage of $19.49 per hour (Pha 2019). Recently, the company has undertaken proactive measures to target labour exploitation in their supply chain. Woolworths contacted horticulture suppliers to advise and impose new responsible sourcing policies. From that time, labour hire firms needed to be certified to work for the organisation’s horticulture supply chain (Hatch 2019). The policy also highlights the responsibility of farms to confirm the legal rights of employees to work in Australia and to pay the labour hire organisations enough to meet workers’ minimum statutory entitlements (Hatch 2019). However, this current case study confirms the reactive nature of Woolworths to only confront unethical company errors once exposed to the public. Their ambiguity impacted more than 5000 Woolworths workers, and the business has since been charged with costs as much as $390 million for the 2020 financial year (Elmas 2020). The scandal weighed heavily on the business’ reputation, many stakeholders disappointed and Woolworth’s net profit dropping to 7.7% (Powell 2020). Woolworths is part of the retail and fast food industry which has recently demonstrated continued court and tribunal activity in the last year. In 2019, several new collective agreements were approved as the SDA continued to reshape enterprise agreements with major firms (Gahan, Pekarek & Nicholson 2018). In January 2019, Woolworths Supermarket Agreement that covers nearly 100,000 employees, was approved. In particular, the agreement was appealed to pursue pay for employees impacted by the wage theft of the 2012 enterprise agreement. However, this appeal was dismissed, and the new agreement was enacted (Gahan, Pekarek & Nicholson 2018). Many organisations align their policies and strategies in response to current events. Woolworths’ reactive nature is evident in their competitors and other industries, but this is not acceptable in contemporary society. There are expectations that firms go beyond minimum standards and that future policies should reflect a proactive ideology to improve market appeal. Therefore, addressing evolving and unprecedented issues in the workplace that will impact their employment relationships. Moreover, the business adheres to the General Retail Industry Award. This award outlines the minimum pay rates and employment conditions. In the Australian market, Woolworths is considered an industry leader so there is a certain expectation that they surpass the minimum standards. Comparatively, Woolworths’ competitors are seen surpassing the minimum pay with Aldi offering $25.13 per hour instead of

Woolworths’ $21.74 per hour (Indeed 2020). Workers are paid in accordance to their skill level under their respective award which outlines the minimum they are entitled to. Based on a 2019 Woolworths enterprise agreement, a Retail Employee Level 1 at Woolworths earns $21.05 per hour (Woolworths Group Limited 2018), while Aldi’s Fair Work Commission Enterprise Agreement shows Level 1 Store Assistants earn $25.31 per hour (Fair Work Commission 2019). Overall, Woolworths and their competitors uphold similar practises concerning policies that affect employment relations. Some include, “Woolies Code of Conduct”, “Work, Healthy & Safety”, and “Diversity & Inclusion” (Woolworths Group Limited 2018). These policies and those similar to it exist with the intent of maintaining proper employer-employer relationships by ‘identifying and resolving workplace issues, measuring employee satisfaction and morale, and providing support and input to the company's performance management system’ (Mayhew 2020, para. 1).

The continuous nature of an employment relationship argues that firms must evolve with the everchanging pressures and opportunities to be positioned favourably in the industry. Unions should continue to advocate new legislative changes designed to prioritise the changing interests of themselves and their members (Fudge 2017). Therefore, also reforming the rules of collective bargaining (Macneil, Bray & Spiess 2020). Despite employee entitlements, each individual is responsible for understanding their worker rights. Recently there’s been an increased use of Employee Voice (EV) versus union-only representation (Sablok et al 2013). The practice has been perceived valuable in the way it’s ‘enhanced employee involvement in decision-making and motivation, job satisfaction and greater trust in management, increased flexibility and efficiency, and improved labour productivity and organisational performance’ (Sablok et al 2013, para. 3). Therefore, strengthening employment relations while able to defend employee entitlements. Woolworths’ wage theft is an opportunity to promote EV where there’s been a decline in union representation, especially since the SDA-Woolworths deal resulted in these underpayments (Sablok et al 2013). Our advancements in technology and social media has provided unprecedented power to use EV to defend worker exploitation. Furthermore, companies scrutinized by employees and unions utilizing EV, put pressure on businesses to enhance their employment relationships and comply with more than the minimum statutory requirements. In the Woolworths underpayment case, merging unions like the Retail & Fast Food Workers Union (RAFFWU) could amass a greater defence against worker exploitation. To reduce this risk, companies and or governments should also consider implementing union vouchers. The pluralist theory supports the introduction of union vouchers as they actively involve union organisations and management together, acknowledging their legitimacy and capabilities (Provis 1996). Union vouchers would be regarded as a kind of company tax on funds or through levies on salaries, that is redistributed for union operations (Bourguignon & Floquet 2019). Funded by their employers, workers would send vouchers to their chosen union represented in the company to strengthen the relationship between employees and union representatives. These vouchers would improve a ‘union’s financial resources and attract membership’(Bourguignon & Floquet 2019, Section 3). As important, asserting the legitimacy of union-management relations. This supports the function of management to interact and communicate instead of demanding in employment relationships. This is important as union density is higher for employees than owner managers (Gahan, Pekarek & Nicholson 2018). Transparency is essential for improving employment relationships. Therefore, the company should proactively ensure copies of the relevant Award and the National Employment Standards (NES) are easily accessible to respective employees. Consequently, improving conversations regarding NES. It also may be worthwhile to create a consultative committee to monitor worker conditions and rights. This body may be consulted and should be communicating any updates on company-related content affecting employees and their jobs. Reinforcing the use of EV, this approach addresses the representation gap experienced by the decline of union membership (Barnes, MacMillan & Markey 2013). However, non-union employee representation might be resisted by Woolworths who may not

allow employees to express dissatisfaction without the fear of retaliation. In this case, the company may benefit from participating in non-union representation to reduce the involvement by unions as third parties in business decision-making (Barnes, MacMillan & Markey 2013). Furthermore, rolemodelling transparent behaviour and representing less power distance. This open communication may be vital to help strengthen employment relations with Woolworths.

In conclusion, the Woolworths’ underpayment scandal can be addressed using both union and nonunion orientated approaches. While unions represent a formidable defence against unethical business, nowadays other strategies including union vouchers, can be applied to uphold worker rights. Furthermore, technology improves access and creates a space to amplify Employee Voice. Despite the company’s existing policies, they should be held accountable as an industry leader and focus on developing proactive policies addressing business errors and worker exploitation before it occurs. Ultimately, employees should take initiative to defend their rights and more companies should strengthen their employer-employee relationships to add value to the business with positive practices.

Reference list: Barnes, A, MacMillan, C & Markey, R 2013, ‘Maintaining union voice in the Australian university sector: Union strategy and non-union forms of employee participation’, Journal of Industrial Relations, vol. 55, no.4, pp. 565–582. Bourguignon, R, & Floquet, M, 2019, ‘When union strategy meets business strategy: The union voucher at Axa’, Business History, vol. 61, no. 2, pp.260–280. Elmas, M 2020, ‘Underpayment ‘flexibility’ for struggling SMEs as Fair Work targets corporate noncompliance’, Smart Company, 13 July, viewed 10 August 2020,

Fair Work Commission 2019, ALDI Derrimut Enterprise Agreement 2019, viewed 12 August 2020, < https://www.fwc.gov.au/document/agreement/AE507363> Gahan P, Pekarek A & Nicholson D 2018, ‘Unions and collective bargaining in Australia in 2017’, The University of Melbourne, vol. 60, no. 3 Hatch, P 2019, ‘Woolworths gives growers tighter rules after exploitation scandals’, The Sydney Morning Herald, 14 February, viewed 10 August 2020,

Indeed 2020, Company Reviews: Salaries, Indeed, viewed 12 August 2020,

Fudge, J 2017, ‘The Future of the Standard Employment Relationship: Labour Law, New Institutional Economics and Old Power Resource Theory’, Journal of Industrial Relations, vol. 59, no. 3, pp. 374– 392. Macneil J, Bray M & Spiess L 2020, ‘Unions and collective bargaining in Australia in 2019’, The University of Newcastle, vol. 62, no. 3

Mayhew, R 2020, Purpose Of Employee Relations, Bizfluent, viewed 12 August 2020,

Pha, A 2019, ‘Wage Theft is Theft’, Guardian (Sydney), vol.1, no. 1893, pp. 1. Powell, D 2020, ‘Investors want heads to roll as Woolies' underpayments rise to $315m’ The Sydney Morning Herald, 26 February, viewed 10 August 2020,

Provis, C, 1996, ‘Unitarism, Pluralism, Interests and Values’, British Journal of Industrial Relations, vol. 34, pp.473-495. Sablok G, Bartram T, Stanton P, Burgess J & McDonnell A 2013, ‘The impact of union presence and strategic human resource management on employee voice in multinational enterprises in Australia’, La Trobe University, vol. 55, no.4. Woolworths Group Limited 2018, Woolworths Supermarkets Agreement 2018, company report, viewed 10 August 2020,...