German discount grocery store chain Aldi, which has been credited with improving competition in the super market industry, found as it expanded in Australia that unions disrupted its operations by complaining to the Fair Work Commission about workplace agreements that most staff wanted.

Based on its experience in Australia, the company said the time taken by the commission to consider enterprise agreements approved by its employees “can be unduly prolonged, costly and disruptive to continuing business operations”.

“This is not acceptable in a modern, flexible economy,” Aldi told the Productivity Commission’s inquiry into the workplace relations framework.

Aldi has grown rapidly since entering Australia in 2000 and now employs 8500 workers in 367 stores and five distribution centres along the eastern seaboard.

Its approach to workplace relations has hit numerous hurdles during the operation of the Fair Work Act brought in by the former Labor government.

In August 2011, Aldi began negotiations with unions and workers to replace agreements struck under John Howard’s Work Choices system. Three months later, the agreements were approved by 70 to 80 per cent of employees.


The commission refused to approve the agreements following representations by unions, including one union which had not taken part in the negotiations. Minor changes were made and the agreements were eventually approved over 18 months after being initially submitted.

“This undue delay had negative consequences for both Aldi and our employees in terms of uncertainty, financial cost and distraction from managing the business,” the company told the inquiry.

Aldi said the scope for the commission to involve itself in the detail of enterprise agreements was “anomalous” when a substantial majority of workers had approved the deals, and unions representing the majority of employees were either supportive or unopposed. No evidence was presented about whether the agreements were reasonable or how they compared with the modern industry award, it said.

“The current act provides significant scope for third parties with very minor coverage to frustrate and delay the finalisation of an enterprise agreement. The FWC also feels obliged to consider in detail each provision of an enterprise agreement, rather than simply ensuring it meets key standards such as a good faith bargaining process, level of employee support, and that it matches or exceeds award conditions,” it said.

Aldi said it was concerned that employers did not have the ability to sit down with commission staff to explain the practical operation of an agreement, including pay and conditions, so that a considered assessment can be done.


In its submission, Aldi says the Fair Work Act should be changed so that companies can make non-union collective agreements directly with employees.

It said unions, despite having coverage and membership at a workplace, should not be allowed to oppose an agreement if they did not participate in the bargaining process.

Aldi also wants the legislation changed to allow increased scope for employees to work additional working hours each week beyond the standard 38 hours.

The commission has previously rejected attempts by Aldi to strike agreements with new employees that guaranteed them working beyond 38 hours each week.

Aldi argued that employees were keen to have guaranteed additional hours and prefer this arrangement to the current legal provisions that state employees work a limit of 38 hours a week and additional hours where needed.

It also backed proposed changes to the laws restricting the current ability of unions to enter workplaces.

Extracted in full from the Australian Financial Review.