Workplace relations

More than 84 per cent of our workforce is covered by collective agreements. Agreements typically provide for consultation arrangements relating to significant operational changes. We recognise the right of our team members to negotiate collectively, with or without the involvement of third parties. We also believe in parties entering good faith collective bargaining to achieve a mutually beneficial outcome.

During the year, the Kmart Stores Agreement was successfully registered on appeal to the Fair Work Commission, with 92 per cent of team members voting in favour of the Agreement.

Bunnings withdrew its application to the Fair Work Commission to approve the Bunnings Warehouse & Smaller Format Stores Agreement 2019 after a protracted period post lodgement during which the agreement remained unapproved. Bunnings has previously provided an increase to base rates as well as an overall performance pay target for each year that its agreement has been expired to ensure its team continue to receive market leading entitlements. It has also retained adult rates of pay for team members from 18 years of age. From September 2020, Bunnings will be providing team members with an overall performance based increase and have also improved penalties by introducing new early morning and evening penalties for permanent team members and increased a range of penalty rates for casuals team members.   

Wesfarmers is contributing to the Australian Government’s Industrial Relations Reform Working Group, which seeks to improve the industrial relations system. Wesfarmers is sharing examples with the Working Group that illustrate the challenges of the current system, such as the protracted process Kmart and Bunnings faced when seeking approval of their Enterprise Agreements, notwithstanding strong endorsement by team members and their major union representatives. The uncertainty created by the protracted process ultimately resulted in Bunnings’ decision to withdraw its application for the 2019 Agreement.

Payroll reviews

During the 2020 financial year, extensive payroll reviews examining tens of thousands of records as far back as 10 years, were completed across the Wesfarmers Group’s businesses. The reviews have involved significant input, analysis and advice from recognised independent advisers with expertise in payroll analysis.

The identification of payroll errors is unacceptable and very disappointing. Remediation of errors for past and present affected team members has been of critical importance, as is restoring confidence of our team members and broader stakeholders in our payroll processes by implementing steps to ensure future accuracy through enhanced systems, monitoring and auditing.

 The Group’s first-half results included the impact of the estimated payroll remediation costs and associated expenses. The initial estimated remediation costs at Target and Wesfarmers Industrial and Safety ($9 million and $15 million respectively) were separately disclosed to support understanding of the underlying performances of those businesses. The errors were not material in the remaining businesses. Significant progress has been made in completing remediation payments to affected, current team members and in determining the precise amounts due to affected former team members with remediation payments projected to be completed by December 2020.

GRI 102-41, GRI 103-1, GRI 103-2, GRI 103-3, 402-1, GRI 407-1