AUSTRALIA | Woolworths Group provided an update on the ongoing industrial action regarding the enterprise agreements at three distribution centres in Victoria and one in NSW.
Woolworths Group has been engaging in good faith in negotiations with the United Workers Union (UWU) for over four months. However, the UWU negotiations remain unresolved.
The UWU commenced indefinite strike action at the four sites on the 21st of November, and the strike action has now been extended to 12 days.
It has sought pay increases at these sites by over 25 percent over three years, materially above inflation, at a time when Woolworths Group has been actively working to keep food and groceries affordable for customers facing ongoing cost-of-living pressures.
The UWU also demanded there be ‘no enforceable performance standard or rate’ that would preclude Woolworths Group’s ability to manage productivity. Using labour standards to manage productivity has been common in supply chains globally and in Australia.
While each site has negotiated its separate enterprise agreement (EA), Woolworths Group has put forward several offers with competitive pay above local market rates and well above the Storage Services Award. The latest offers would take hourly rates at these sites to approximately 40 percent above the award.
The Shop, Distributive, and Allied Employees Association (SDA) also represented a number of the team members at the affected sites. The SDA recently endorsed Woolworths Group's offer to resolve the EA negotiations at one of the affected sites, the Melbourne South Regional DC (MSRDC).
Following that endorsement, Woolworths Group has extensively enquired about the MSRDC team members, and a majority have expressed their desire to return to work.
However, Woolworths Group has been unable to reopen the site because UWU refused to give any assurance of safe passage for team members who wished to work.
To minimise the customer impact from this industrial action, Woolworths Group has deployed a range of contingency plans, including building store inventory, leveraging the wider distribution network, and having some suppliers deliver directly to stores.
Due to the extended disruption, some Woolworths Supermarkets in Victoria, ACT, and NSW experienced stock flow limitations on some lines, impacting customer product availability for ambient, chilled, and freezer lines.
Since the start of the industrial action, Australian food sales have been negatively impacted by approximately AUD 50 million. Sales are expected to be further affected until the industrial action has been resolved.
At this stage, the complete financial impact is still being determined. It will depend on the duration and extent of the ongoing industrial action across the affected sites and the time taken to rebuild inventory ahead of the Christmas trading period. This one-off impact was not factored into the forecast earnings range for Australian Food for H1 F25 in October.
“We sincerely apologise to all of our customers for the inconvenience caused by the inconsistency of supply across some product lines in some of our stores in Victoria, southern NSW and ACT,” said Woolworths Group CEO Amanda Bardwell.
“We are working hard to try and improve the situation and would like to thank our customers for their understanding and treating our teams with respect.”
Woolworths Group has remained committed to resolving the action as soon as possible and will continue to work hard to minimise the impact on customers and the team.
