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Progress against EU reporting obligations

Find out more about Coles' progress against EU reporting obligations:

Comparison between 2015 and 2016

Number of trolley collection wage underpayment complaints referred to Coles on the Hotline:

  • 2016: 11 complaints investigated, six of these received via the Wage Underpayment Hotline
  • 2015: 21 complaints investigated, 12 of these received via the Wage Underpayment Hotline

Actions taken by Coles to investigate the trolley collection wage underpayment complaints and the average time taken to conclude the investigations about such complaints from the Hotline:

  • 2016: Average time to investigate complaints 27 days (this relatively lengthy average was due to two investigations concerning one contractor, whose services have since been terminated).
  • 2015: Average time to investigate complaints 19 days

The findings with respect to each such complaint received by Coles on the Hotline:

  • 2016: Underpayments determined in 5 instances (three of these underpayments related to one contractor, who is no longer contracted to UTC).
  • 2015: Underpayments determined in 6 instances

Each instance where Coles has determined there is an underpayment and the amount of each underpayment:

  • 2016: A total of $17 169.71 was backpaid to the five employees
    NB: At the time the 2016 report was prepared one investigation was ongoing. The employee has subsequently been backpaid $2352
  • 2015: $40 440.60 was backpaid to six employees

In-house trolley operations

In 2015, Coles reported that by the end of that year, trolley collection at 558 of their 776 stores would be performed in-house. This figure rose to 655 in 2016.

Coles had originally anticipated that the trolAley collection function would be performed completely in-house by the end of September 2016. Progress has been slower than anticipated. Reasons for this include issues with the supply of the custom-modified trolley collection vehicles that Coles uses.

Audit reports

The EU requires annual audits of a minimum of 20% of direct sub-contractors of UTC for a one month period, certified by a third party Certified Public Accountant.

The 2015 audit of 15 trolley contractors determined that 245 employees had been underpaid over $112 000. For the same period there were around $53 000 in overpayments. Following this audit Coles restated its commitment to working with the FWO in order to meet the requirements of the EU as well as ongoing collaboration with UTC.

The 2016 audit of 16 contractors identified a total of $20 843 in underpayments under the Cleaning Services Award 2010.  This amount includes a total of $2458 which, when scrutinised, were found to not be underpayments (e.g. the owner of a contracted firm performed work and did not pay himself a wage, and an employer recovered a cash advance from an employee). This means that the total underpayment was $18 385 to 121 workers. For the same period there were around $60 921 in overpayments.

All the underpayments have been corrected.

Coles followed up each identified underpayment and investigated how the errors occurred. Where problems were identified that indicated a pattern of underpayments, Coles also looked at the preceding and following pay periods. No dominant themes were identified by Coles as to why employees were underpaid. Reasons for underpayments included incorrect application of penalty rates, employees being wrongly classified and casual and part time loadings not being paid.

Working with UTC, there have been a range of follow-up actions concerning the contractors, including four of the contractors being issued with contract termination notices as a result of their audit results and consideration of their audit history.

The audit reports also identified overpayments in many instances. Where overpayments were identified, the most likely explanation for this is that the contractors have paid trolley collectors during breaks, which they are not required to do. None of the overpayments were offset against underpayments.

In addition to recalculating pay slips and bank statements to award entitlements, the auditors also compared rostered hours to the timesheets showing actual hours worked (“Test C – Timesheet vs. Roster”). Discrepancies were found with instances of rostered hours exceeding timesheet hours being greater than times when timesheet hours exceeded rostered hours. Further investigations did not identify any particular concerns about these discrepancies, the most common explanation was that the contractor also performed work for businesses other than Coles at the same site.

Workplace relations training

Coles advises that after the initial workplace relations training under the EU was delivered, they have continued to train team members involved in the procurement or management of contracted trolley collection services, and since the commencement of the EU has trained 94 team members.

Enforceable undertaking continues

The FWO acknowledges the progress made by Coles under the EU to date.

Coles is also pleased with the progress that they have made to date, notwithstanding that there have been significant challenges bringing the trolley collection function in-house.

The company believes that there have been service improvements and that ultimately the in-house model will deliver services better and cheaper than the contracted-out services.

The EU continues to operate until November 2018, but will conclude earlier if Coles finalises the process of taking the trolley collection process in-house.

Coles is required to submit another annual report in November 2017.

The FWO notes that collection of trolleys remains either fully or partially contracted out at just over 100 stores. However, it is acknowledged that there are significant challenges at some locations and it is likely that in-house trolley collection at all stores may never be achieved. Further, it is acknowledged that there has been significant improvement in the management of contracting and sub-contracting arrangements and the FWO encourages Coles to remain vigilant in this area. 

Read Coles' Annual Report.