03 May 2015

Shoppies union pay Coles and Woolworths millions to boost membership

National SDA president Joe de Bruyn insists that they agreed "absolutely" with the union leadership on same sex marriage.

Australia's biggest private-sector union pays major employers including Coles and Woolworths up to $5 million a year in commissions that help maintain its large membership, and influence in the Labor Party.

The ALP's largest union affiliate, the Shop, Distributive & Allied Employees Association (SDA) plays a significant role in social policy debates, its influence viewed as pivotal to marriage equality in Australia.

"If you were starting with a clean slate maybe you'd do it differently":

Gerard Dwyer, SDA national secretary.

Fairfax Media has investigated the political, industrial and social clout wielded by the SDA, and its close relationship with employers, including payments to retailers of as much as $40 million over the past decade as "commission" for the employers deducting union fees from members' pay packets.

The Catholic-led union has been a stumbling block for same sex marriage legislation, and could be again when the issue returns to Parliament later this year.

This week, the union again weighed into the marriage issue, slamming Deputy Opposition Leader Tanya Plibersek's​ call for Labor's July national conference to force a binding vote on the issue.

The shoppies' power is based on numbers in the union movement, the ALP and in parliaments, with 10 to 12 federal MPs within its immediate orbit of influence.

The Andrews government in Victoria includes about nine SDA-linked MPs – although a recent internal spat appears to have reduced that number to seven, for the moment – including cabinet ministers and Deputy Premier James Merlino​.

But the ultimate source of the union's strength is its 200,000-plus membership including supermarket, department store and fast-food staff, warehouse workers, hairdressers and models.

The large membership – and its maintenance – has become more important as other unions have declined over the last 25 years, giving the SDA proportionately more power in the ALP.

The union's methods for gaining and maintaining members are unusual by current industrial relations standards. It pays up to 10 per cent of members' dues in commissions to major employers including Coles and Woolworths, ostensibly for the cost of payroll deductions.

The fees – totaling as much as $5 million a year – are likely well in excess of the true cost to employers of electronic payroll deductions.

The figures are based on publicly available accounts for some of the larger SDA branches which detail the "commission" payments.

Other unions, including the National Union of Workers and meat workers union, also pay fees for payroll deductions, but the payments are much lower and in the tens of thousands, not millions.

SDA national secretary Gerard Dwyer said the union had been paying the fees since a 1971 ACTU-brokered "closed-shop" agreement struck between the big retailers and unions including the SDA.

Under that agreement employers literally signed up members. The fees remain despite closed shops being banned nearly 20 years ago.

Mr Dwyer defended the payments as an administrative charge. He said they helped the union, which struggled with turnover of workers in the casualised and part-time retail sector. "It's just there, it's just a fact of life," he said. "If you were starting with a clean slate maybe you'd do it differently."

Mr Dwyer denied the payments compromised the union or bolstered its membership. "I completely reject there is any linkage between the money and the energy in our representation."

He said retail workers in Australia were some of the highest paid in the world.

A Coles spokesman did not answer questions on how much it receives from the SDA but said it receives a "small fee" to offset costs. Woolworths also would not say how much it receives and said its "administration of these fees" was in line with other companies.

While senior Labor figures estimate about a sixth of Labor's caucus is closely aligned to the SDA – the largest union bloc in the federal party – it also has a reputation for using hardline tactics in the ALP to bolster its clout.

Labor's platform supports marriage equality, however, in 2011 a compromise pushed by the SDA, it also allowed MPs a conscience vote. It will be an issue again at the ALP national conference in July.

Prominent lobby group Australian Marriage Equality says SDA could be the difference between same sex legislation passing Parliament this year.

"It [the union] influences the votes of enough Labor senators and MPs to make the difference if, as seems likely, the overall vote is close," said the group's national director, Rodney Croome.

Political scientist John Warhurst said the SDA was set to play a "crucial" role in the debate.

"A conscience vote on both sides would mean the matter will be fought out on individual basis, MP by MP; and the numbers would be very important.

"The legislation would only pass if you have a pretty strong vote from ALP MPs. So the SDA could well be crucial to the outcome."

But even if Labor changes its policy to require a binding vote, SDA-linked and MPs are likely to cross the floor, and risk expulsion, to vote against same sex marriage.

In 2012, a marriage equality bill was defeated 98 to 42 when close to 30 Labor MPs voted with the Coalition against it. Many of the Labor MPs who voted no were linked, to varying degrees, to the SDA.

"If it wasn't for the SDA," said Mr Croome, "Australia may well have had marriage equality in 2012."

National SDA president Joe de Bruyn insisted that, while the union had never polled its members on the issue, they agreed "absolutely" with the union leadership on same sex marriage.