One staff member, who wished to remain anonymous, said Kikki.k "deliberately excluded" them from negotiating or voting for the new agreement, and "left [staff] wondering if and when we will be moved onto it". The agreement was voted up by managerial staff.

The worker said staff "feel unfairly treated on our current arrangements where we are taken advantage of and not paid any weekend penalty rates, or public holiday rates at all".

While Kikki.k advertises and interviews for store jobs they require any non-managerial hires to sign up as casuals with Employment Innovations.

The labour hire company, which workers rarely speak to or interact with, pays casuals a flat rate of $24.30 an hour in line with the award minimum but does not pay the award rate of $26.24 on Saturdays, $38.88 on Sundays or $53.46 on public holidays due to a 2007 enterprise agreement that pays only the "standard hourly rate".

The company also operates under different names, including HRO Initiatives and EI Administrative Services, and workers say they are too confused over the correct name to apply to terminate the old deal.

Fair Work Commission records show retailers and hospitality employers have frequently used the firm to engage workers on expired agreements at significantly below award rates.

Investment risk

Despite paying no penalty rates, Kikki.k still lost $5.07 million in the last financial year in part due to a $6 million, or 30 per cent, rise in labour costs.


The revelation that Kikki.k does not pay penalty rates could put at risk capital for its global expansion plans, with boutique private equity firm TDM Asset Management having recently taken a 20 per cent stake in the company.

Industry super fund First Super chief executive Bill Watson last week said it was reviewing its $100 million private equity program over concerns companies that have enterprise agreements with lower wages than the award were an investment risk.

"Businesses based on unsustainable labour costs or challengeable industrial arrangements pose a high risk of a permanent adverse movement in labour costs, potentially impacting on returns," he said.

Kikki.k head and former David Jones CEO Ian Nairn did not respond to questions about how the new agreement would affect labour costs.

"The adoption of the new kikki.K EA represents a significant investment over and above the General Retail Industry Award and is one that we are committed to passing onto our team," he said.

"To be absolutely clear, all current and future Australian retail team members will receive more favourable employment conditions overall than under the General Retail Industry Award."

Australian Council of Trade Unions president Ged Kearney has called for "sweeping reform to ensure that labour hire is better regulated".

"We have an employer pushing through a new EBA to strip penalty rates from team leaders while still using a labour hire firm armed with a seven-page agreement signed a decade ago with no union involvement to deny their other workers proper rates of pay."

"While Kikki K's behaviour is obviously reprehensible, it is also a symptom of a much larger issue with the industrial relations framework, which has allowed the balance of power to swing toward employers."