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NUW agreement at Chemist Warehouse challenges misuse of labour hire business model

28th March, 2019

The National Union of Workers (NUW) has concluded a new enterprise agreement for distribution centres at Chemist Warehouse, following more than two weeks of strike action (see yesterday’s post). 

The agreement includes significant wins for the union on its claims to address the high utilisation of labour hire staff by the company, with many of these workers ‘on call’ and on lower pay rates than direct employees.

According to the union’s Facebook page, under the new agreement:

  • all workers will receive a pay rise of 18.75% over 4 years (8.75% within the next 2 weeks) [this seems intended to apply to direct employees of Chemist Warehouse, given what is said below about different pay increases for labour hire workers]
  • all casual labour hire workers who went out on strike will get permanent jobs
  • a job security clause will ensure other labour hire workers obtain permanent jobs after 6 months
  • labour hire staff will receive a 16% pay increase (6% up front), and then be entitled to ‘site rates’ if they are legislated by government [presumably a reference to federal Labor’s policy to legislate the principle of ‘same job, same pay’ for labour hire workers]. 

Through these provisions of the agreement, the NUW has made huge inroads into a major company’s extensive use of labour hire. In many sectors of the economy, including warehousing, logistics and manufacturing, the original intention of labour hire – to provide a supplement to the core workforce in response to business needs – has been usurped by the engagement of large numbers of long-term, labour hire casuals.

The Chemist Warehouse agreement is an important clawing back of that misuse of labour hire. The NUW has shown great innovation in its Fair Food Campaign over the last few years, but in this case it’s shown that the more traditional industrial tools (strikes, protests) are still effective – especially when combined with organising and communication through social media.

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