FPA bonanza for unions and lawyers

Roger Partridge
Insights Newsletter
14 April, 2022

Is a van driver who delivers shopping ordered online a member of the transport industry or the retail industry? Either way, why would you want to know?

Well, you would if you were a driver – or a retailer – in Australia. That is because, under Australia’s so-called modern awards system, occupation-wide awards set rates of pay that apply to everyone employed in that occupation. The terms set by some awards are more generous than others. Consequently, working out which award covers which worker matters.

The Employment Contracts Act abolished New Zealand’s system of industrial awards in 1991. Since then, businesses on this side of the Tasman have been spared complex demarcation disputes that still plague industrial relations in Australia.

But the Government’s Fair Pay Agreement Bill, which passed its first reading in Parliament last week, will mark the return of a straight-jacketed approach to setting wages and salaries. The only winners will be the unions, who will be paid by taxpayers to play centre-stage in wage bargaining – and the lawyers.

In Australia, the question about the van driver involved a long-running legal saga. The case was brought by the Transport Workers’ Union. It centred on whether Coles Group, the supermarket chain, had underpaid two online-shopping delivery drivers. Both were members of the TWU. Both had been employed following Coles' shift in work practices from a third-party delivery model using contractors to a more customer-focussed in-house regime.

The TWU argued the drivers were covered by the road transport award. Coles argued the drivers were retail workers and covered by the retail award. The distinction was significant because the two awards have different shift structures, penalty rates and break requirements.

The case was first heard by a full bench of Australia’s Fair Work Commission. On appeal, the Federal Court ruled delivery drivers for the supermarket’s online business were correctly employed under the retail award, rather than the transport award.

The court found the drivers were “the modern incarnation of the home delivery service provided by milkmen, butchers, bakers and grocers in years past.”

This aspect of the judgment might recall a golden age of personal service by bicycle deliveries from the local grocer. But the case will cause a shudder to those whose memories of New Zealand’s industrial relations extend back to the 1970s and 80s.

The Initiative’s research suggests Fair Pay Agreements will be bad for just about everyone other than unions and employment lawyers. With the Fair Pay Agreement Bill now before Parliament, both will be rubbing their hands with glee.

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