Storms on the horizon as unions threaten distribution and delivery

By Alex Millman, NRA Legal

The union movement has put major retail brands on notice of supply chain disruptions as part of the wider effort to secure more advantageous working conditions for transport workers.

In a speech to the Transport Workers’ Union (TWU) National Council in Darwin last week, TWU National Secretary Michael Kaine warned of a “winter of discontent, followed by a spring offensive” against “retailers who think they can keep squeezing transport companies and their workforces.”

Mr Kaine ended his address with the warning to retailers that “I am not threatening disruption. I am promising it.”


The supply chain accountability agenda

Mr Kaine’s speech referred to the TWU’s approach of seeking to make the “economic employer” accountable for wages and conditions in the supply chain.

This model requires the company at the end of the supply chain – the retailer – to be accountable for pay and conditions in the other companies in the supply chain, specifically in the TWU’s case, the distribution element of the supply chain.

The argument behind this model is that commercial pressure from retailers “squeezes” transport companies and sole-operators to cut corners, particularly on safety matters, in order to remain competitive.

By targeting retailers – the “economic employer” – the TWU hopes to compel those businesses to accept responsibility for the pay and conditions of transport workers through their tendering and contracting processes. The timing of this campaign is as transparent as the rhetoric from the TWU, with the enterprise agreements of most major transport companies due to expire in the next few months.

In effect, the TWU is looking to use the next round of bargaining with transport companies as a shield to engage in conduct that it hopes will reverse the direction of the commercial pressure so that it falls on retailers.


“Disruption” for retailers

This is not the first time that the TWU has promised disruption for retailers as part of its efforts to advocate on behalf of transport workers.

In 2017, the TWU launched a campaign against Aldi by picketing several Aldi retail shop fronts, with placards alleging that Aldi was directly responsible for pay and conditions in unrelated transport businesses.

When Aldi challenged these pickets in court, the court found that the statements made by the TWU were “likely to mislead” and were “plainly directed” at Aldi customers, with the potential to damage Aldi’s corporate reputation.

However, the court also found that because the TWU was not a “trading or financial corporation”, it was not subject to the Australian Consumer Law, which prohibits misleading statements.

As such, even though the TWU was making misleading allegations likely to damage Aldi’s reputation and relationship with its customers, those statements were not unlawful.

As the TWU’s campaign expands to the wider retail industry, it may be expected that more major brands find themselves in the firing line.


Expanding the scope to gig workers

The disruption campaign promised by the TWU will not only extend to conditions in transport companies, but also to gig workers such as those providing services through Airtasker, Menulog and UberEats.

Although Menulog has already agreed to trial an “employee model” for its drivers in Sydney, and is considering applying to the Fair Work Commission for a new modern award to cover the food delivery industry, other providers remain targets of union activism.

With this – and the TWU’s rhetoric – in mind, it would not be at all surprising to see pickets in front of major fast food chains that utilise the services of gig-work apps for delivery drivers in an effort to secure pay and conditions for these workers.


Options for employers

In dealing with activism such as that proposed by the TWU, businesses are rather limited in how they can effectively manage the situation as the law by and large does not prohibit the conduct by employees working for other employers.

However, each situation will depend on its individual circumstances, and legal rights may vary from business to business and State to State.

Employers should exercise caution if their employees seek to take time off to participate in the proposed action, as while it may not qualify as “industrial action” in all cases it may nevertheless be protected under other laws. If employees do seek to participate in any activism alongside the TWU or other unions, particularly if they do so during paid time or paid leave, it is important that employers become aware of and understand their options.

Most importantly, businesses should consider how they will respond to adverse media attention if it becomes a target of disingenuous claims as part of the proposed campaign.


For a confidential discussion about your business’s rights and obligations in cases of union activism at your workplace, please call NRA Legal on 1800 572 679.