Venturing in Australian Supermarket Industry

Topic

Venturing in Australian Supermarket Industry (A Case of Very Excellent Supermarket)

Instructions

The Very Excellent Supermarket (VES) chain is owned by a well-established and large German company that is seeking establish a foothold in the Australian supermarket industry, starting in New South Wales. They have already set up one supermarket in Sydney and are well advanced with plans for two more in Sydney and one in Newcastle, each expecting to employ around 30 workers. These four, however, are just the beginning.

You are a new graduate, recently employed by VES as a Human Resources Officer. The CEO of VES (Australia), Heather Excellent (no relation!), wants to move away from using the relevant award (i.e. the General Retail Industry Award) to a new Enterprise Agreement (EA) covering all employees, existing and future. She has asked you to provide her with strategic advice on how to go about making the EA.

Heather has three main objectives with the EA:

  1. She does not like the hours of work and roster provisions in the award and wants the flexibility to operate seven days a week without restriction.
  2. She is happy to pay above award wages, but she wants to eliminate penalty rates for Saturdays and Sundays.
  3. She wants to ensure that employees are engaged with the business, but does not mind whether this involves working with the union (i.e. the SDA) or through non-union mechanisms.

THE TASK:

Your task is to prepare advice for Heather (in the form of a report) about how to achieve her objectives in a timely manner and with minimum industrial conflict. More specifically, she wants you to address the following two questions:

  1. What are the main legal requirements that must be met in order to ensure the EA is approved by the Fair Work Commission?
  2. Within these legal constraints, how should she approach the negotiation of the EA?

Answer preview

Predominantly, this report is intended for offering Very Excellent Supermarket an advice concerning the way to improve and develop its supermarket business to ensure it succeeds in Australian industry. Several problems were identified, based on the currently operating supermarket in Sydney, which would deter Very Excellent Supermarket from succeeding in the new market. Identified problems include static working hours and roster provisions, irrational weekend penalty rates, and lack proper unionization or labor advocacy systems for employees. Considering the provisions of Fair Work Commission, guarded by the Fair Work Act 2009, elimination of possible hindrances to a successful business venture in Australian supermarket industry, Very Excellent Supermarket will be required to make working hours and reporting procedure flexible, pay above award wages while eliminating weekend penalty rates, and allow employees to unionize or join other non-union mechanisms.

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