Trolley collection is an important component of supermarket retail. Ready access to a trolley enables customers to more conveniently carry their shopping during store visits.
Every week Coles serves in excess of seventeen million customers, requiring over five million trolley collections a week.
As a type of work, trolley collection is a relatively low skill and labour intensive enterprise, attracting a large number of vulnerable workers. While the 2011 census disclosed near 50% of the 1500 trolley collectors across Australia are under the age of 25 and 40% don’t have any education beyond Year 10, the FWO considers this number of trolley collectors an under-estimate, based on industry feedback.
In the past decade, the FWO has found a significant number of workers engaged in trolley collection are from non-English speaking backgrounds. Due to a combination of factors such as language and education barriers, visa conditions and cultural constraints, this worker cohort is vulnerable to exploitation, including significant wage underpayments.
Vulnerable workers are often unaware of their rights in the workplace and can also be reluctant to report their working conditions.
Underpayment of employees is common in the trolley collection industry. Since 2006, the FWO has filed 14 litigations against trolley collection sub-contractors. This is disproportionate to the number of employees in the industry. An Inquiry into the procurement of trolley collection services by Woolworths Ltd in 2016 found some trolley collectors being paid rates as low as $10 per hour and 79% of the 130 sites visited had indications of some form of non-compliance with workplace laws.
In 2012, the FWO commenced legal proceedings against two sub-contractors operating at several Coles sites, alleging they had underpaid 10 trolley collectors over $200,000. Coles was initially named as a respondent to the litigations, with the FWO alleging that Coles knew that trolley collection employees at its sites were not being paid the correct minimum wages and conditions, and that the company failed to take effective action to require its trolley service providers to comply with workplace laws.
In October 2014, the FWO executed an EU with Coles in relation to Coles’ trolley collection arrangements. In entering into the EU Coles publicly declared it has an “ethical and moral responsibility” to join with the FWO and stamp out exploitation of vulnerable trolley collectors.
The FWO chose to enter into a co-operative arrangement with Coles through the agency of an EU rather than pursue these proceedings. This followed assessment that the FWO could secure superior outcomes for all trolley collection workers engaged by Coles.
EUs are made under section 715 of the Fair Work Act 2009 (FW Act) when the FWO believes that someone has seriously breached the Act, the breach is serious and the party concerned acknowledge this, accept responsibility and agree to fix the harm.
The EU with Coles contained a number of requirements dedicated to building a culture of compliance, including setting up a hotline for subcontractors to raise issues with Coles directly, auditing wages, establishing a fund to guarantee correct payment of subcontractors, and moving towards a service model where all trolley collectors will be engaged as employees directly by Coles.
In accordance with the terms of the EU, Coles has submitted two annual reports to the FWO on progress made against each of the undertakings contained in the EU. The first of these reports was published by the FWO on 10 March 2016.
Where Coles does not directly employee trolley collectors, it contracts trolley collection to another business, United Trolley Collections [ACN 115 542 946] [UTC], which in turn engages separate trolley collection businesses to undertake the work. UTC entered into a Proactive Compliance Deed with the FWO on 13 May 2014.
UTC is a major provider of trolley collection services. At the time of entering into the compliance partnership it had more than 60 independent contractors and provided services throughout Australia; including at more than 700 Coles sites, and some Woolworths sites.
Under the terms of the Deed with the FWO, UTC agreed to undertake a range of proactive compliance activities designed to facilitate and ensure compliance with Commonwealth workplace laws by its independent contractors, including by providing training to contractors and auditing the pay of a percentage of trolley collectors each year. This initiative is designed to help end the exploitation of trolley collectors, encouraging businesses to take a different approach to their responsibilities when it comes to sourcing and providing labour.
The FWO is committed to working with larger companies to support them in their procurement decisions, including ensuring that processes are in place to ensure supply-chain contractors do not undercut minimum employee entitlements. UTC continues to cooperate with the FWO to promote compliance throughout their network. UTC has advised the FWO on their ongoing monitoring of contractors that they engage with and removal of contractors who perform unsatisfactorily. During the term of the Deed very few requests for assistance have been received relating to the UTC network, and UTC cooperates fully with the FWO regarding any enquiries made.
As noted below, Coles is in the process of bringing their trolley collection function in-house.
This report provides an overview of both annual reports and outlines the progress made by Coles since the EU was executed.