Banducci, Woolworths' CEO said the company will ensure workers were paid legal rates © 123RF
Banducci, Woolworths' CEO said the company will ensure workers were paid legal rates © 123RF

Woolworths overhauls farm supply chain operations

27 November 2017

Woolworths announced it has agreed two deals with the National Union of Workers (NUW) to increase warehouse worker wages and overhaul how workers in its supply chain are treated.

The supermarket giant said the two deals were made as part of Woolworths’ continuing review of its ethical sourcing practices after more than 2,000 warehouse workers in Victoria and NSW voted to strike, threatening to close warehouses in the crucial pre-Christmas trading period.

The first deal includes a wage increase of about 4% a year—twice the national average— and vastly improved redundancy pay for the warehouse workers. 

The second supply chain deal will see a wage increase of more than $10 an hour for under-paid farm workers, who were previously paid barely half the legal minimum wage of $18.29, and an overhaul of how the supermarket operates its supply chain.

Tim Kennedy, NUW national secretary, said while the wage increases in the warehouses was large, Woolworths’ decision to change how its supply chain operates may have more significant, long-lasting effects. 

He added the supply chain agreement was in part a response to a near three-year campaign by the NUW after it had exposed widespread exploitation in the horticulture sector and among suppliers to the big supermarkets.

Brad Banducci, Woolworths’ chief executive, said under the second deal the company would work with the union and others to ensure labour hire providers complied with labour standards and that workers were paid legal rates.

He said it would involve labour hire providers in its direct food supply chain being pre-approved by the supermarkets and the NUW and workers being told about their workplace rights and the right to join a union.

“Our belief is finding the right solution to address human rights risks in horticultural supply chains in Australia will be best achieved by working collaboratively with farmers, government and unions,” he said.

“We recognise the current efforts of these stakeholders, including the NUW, and are committed to actively participating in a process to deliver genuine improvements and sensible and practical reform.”

Meanwhile, a report released last week found that wage theft was endemic across Australia, with a quarter of international students and a third of backpackers earning $12 an hour or less.

The report, Wage Theft in Australia, said the farm sector was the worst—almost one in seven doing farm work earned $5 an hour or less and almost a third earned less than $10 an hour.

Kennedy said Woolworths had taken a big step toward eradicating wage theft and exploitation in the sector.

“In making these commitments, Woolworths is acknowledging the extent and seriousness of the problem of exploitation on Australian farms,” he said.

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