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'Shoppies' union face Senate probe over wages scandal

One of Labor's biggest backers, the giant shop assistants union, will be subject to a parliamentary inquiry over wage deals that have cost workers hundreds of millions of dollars.

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The man who exposed Coles in his spare time

Meet Josh Cullinan, who, on nights and weekends, uncovered the widespread underpayment of Coles employees.

The new Senate probe is a response to the wages scandal revealed by Fairfax Media involving deals between some of Australia's largest employers, including McDonald's, Coles and Woolworths and the Shop, Distributive & Allied Employees Association (SDA).

The inquiry will examine the lower penalty rates received by many workers employed by big business and whether the Fair Work Act needs to be changed to protect these workers from being paid less than the minimum rates of the award.

A 12-month Fairfax Media investigation revealed how the SDA deals with employers left more than 250,000 workers paid less than the award – the wages safety net – and saved big business more than an estimated $300 million a year.

Independent senator Nick Xenophon moved for the new inquiry, saying the cosy enterprise agreements with big employers had disadvantaged low-wage workers.

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They had also provided an unfair advantage to big businesses by undercutting awards adhered to by smaller retailers, Senator Xenophon said.

On Monday the Government, Labor opposition and the Greens supported the Xenophon push, even though the SDA is Labor's largest affiliate and carries significant political weight within the ALP.

SDA rival, the Retail and Fast Food Workers Union (RAFFWU), was created at the end of 2016.

RAFFWU secretary Josh Cullinan, who helped expose the wages scandal, said he supported Senator Xenophon's inquiry but said it should not delay separate changes proposed by Greens workplace spokesman Adam Bandt.

"Workers are losing $1 million a day and that needs to be fixed immediately," Mr Cullinan said.

Mr Bandt has proposed changes to the Fair Work Act to protect workers from SDA-style wage deals that traded away penalty rates with inadequate compensation.

Such amendments would ensure workers on collective agreements have their pay compared to the minimum full rate of pay in the award – which includes casual loadings and penalty rates – rather than just the minimum base hourly rate. Mr Bandt's proposed legislation has been referred to a separate Senate inquiry.

In 2016, the full bench of the Fair Work Commission, in a landmark decision, quashed an agreement between Coles and the SDA as it underpaid workers and failed the 'better off overall test.'

Coles workers are now employed on an older agreement from 2011 which is currently being challenged by night-fill worker Penny Vickers in the Fair Work Commission.

Ms Vickers has launched a huge back-pay claim for tens of thousands of Coles workers and wants them to be paid award rates. The Commission recently agreed to give her access to Coles internal documents, a move opposed by the supermarket.

She has argued Coles had misled workers and the Commission on whether workers were paid above the award.

Coles has denied this but recently a lawyer for the supermarket conceded in the Commission that about half the workforce was paid less than the award.

Opposition workplace spokesman Brendan O'Connor said if there was a need for change to the better-off overall test, Labor would consider it.

"Labor introduced the 'better-off overall test' after the former Liberal Government's WorkChoices abolished any fairness test, if the test needs to be strengthened then Labor will examine it."

Employment minister Michaelia Cash attacked Labor's position.

"Mr Shorten and the union movement have no problem when big unions and big corporates do deals to cut Sunday rates, but pretend to be outraged when such rates are reduced for small businesses by the independent Fair Work Commission."

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