Ilustration: Matt Golding The full bench appeal, heard in the Fair Work Commission last week, could result in thousands more workers being found to have been paid less than the award, the basic wages safety net. If that is the case, the workplace deal between Coles and the union – the Shop, Distributive and Allied Employees Association (SDA) – could be ripped up, or overhauled. A new agreement that lifts pay rates higher would likely cost Coles tens of millions dollars more in extra wages. The underpayment scandal at Coles was revealed nearly a year ago in The Sunday Age and based on work by Josh Cullinan, a senior official at the National Tertiary Education Union. Mr Cullinan, who did the work in a personal capacity, found the deal should have failed the "better off overall test", which requires workers to be paid more than the award. Soon after, Mr Cullinan, backed by the meatworkers' union, challenged the deal in Fair Work.

As a result, Coles was forced to provide undertakings to lift casual penalty rates from 20 to 25 per cent and pay young workers more. Now, Mr Cullinan and his backers have appealed, wanting to challenge pay rates for full-time and part-time Coles workers. The stakes are substantial if Coles and the SDA lose. Coles would be forced to make further admissions that it paid its staff substantially less than their basic legal rights, the latest example of corporate Australia underpaying its workers. Its rival, Woolworths, which itself employs tens of thousands of supermarket workers, will also be vulnerable. Its talks for a new workplace deal have stalled due to the ramifications of this case. The case, already, is embarrassing for the SDA, one of Australia's largest and politically influential unions. It has shone a spotlight on its dealings with big companies and how workers fare from them.

Last year, a Fairfax Media investigation uncovered that the SDA pays major retailers, including Coles and Woolworths, up to $5 million a year in commissions for payroll deductions. In the Fair Work Commission last week, the high stakes were reflected on the legal benches. Coles had assembled a team of expensive lawyers, including one of Australia's top industrial barristers, Stuart Wood. Nearby was the SDA's barrister, Warren Friend. Sitting further down the bench challenging this legal firepower were Coles supermarket worker Duncan Hart, Mr Cullinan and a single lawyer, Siobhan Kelly, who is working for free (with only a small chance of recovering costs). Ms Kelly told the hearing that the Fair Work Act was clear: employees must be paid better under a workplace deal than the "bare entitlements" of the award.

"Nothing has been said by Coles and the SDA about those employees that are 20 to 30 per cent worse off in real wage terms under this agreement than the award." Much of the two-day hearing dealt with arguments about the credibility – or otherwise – of Coles' expert witnesses. The witnesses claimed non-cash benefits in the Coles deal made the workers better off than the award. (In one example a worker was only better off once it was assumed they had received blood donor, defence, carers, natural disaster and unpaid leave, and were also made redundant and off work injured for six months, all in one year.) Mr Wood, QC, for Coles, argued that the non-cash benefits were substantial and "the value of intangibles is as old as accounting itself". He said the Fair Work Act's better-off-overall test needed to weigh all the benefits and detriments of a deal, not just wages.

Mr Wood warned that wage increases in the agreement would be lost if it was quashed. Ms Kelly rejected that, saying it would be at Coles' discretion and argued the disadvantages in the deal were so great that "no amount of non-financial benefits can remedy it". The Fair Work full bench reserved its decision on Thursday. It remains to be seen if, in real life, trolley operator Duncan Hart and data-cruncher Josh Cullinan will be as successful as the Kerrigans in The Castle.