Wesfarmers worried next round of IR changes will lift labour costs

The chief executive of conglomerate Wesfarmers, which owns the Coles and Bunnings brands, has expressed concerns that the Rudd Government’s new modern awards could increase the possibility of industrial disputes and harm the economy’s recovery.

Richard Goyder, who addressed shareholders at Wesfarmers’ annual general meeting yesterday, expressed concerns about the strength of the economic recovery and said rising interest rates coupled with a reduction in the number of hours being worked could “impede the pace of recovery”.

He also underlined the company’s concerns with the Government’s overhaul of the awards system. From 1 January, a new “modern” retail award will come into effect and retailers including Coles and Bunnings have expressed concerns that labour costs will rise as items such as penalty rates for weekend workers increase.

“We are… concerned as one of the nation’s largest private sector employers, that new industrial relations laws add complexity and the possibilities of disputes at a time when that is the very last thing the economy needs,” Goyder told the meeting.

He also revealed Wesfarmers had already seen an impact from the first lot of IR changes that occurred when the Rudd Government’s Fair Work Act came into effect on 1 July.

Goyder says the company had seen situations where a minority of employees can bring in a new union “and that can disrupt an entire enterprise bargaining arrangement”.

“In general the industrial relations climate in Australia is pretty good and that’s the way it should be… unfortunately the new laws to create an opportunity for things to go off the rails a bit,” Goyder told the Australian Financial Review.