The pharmacy retailer could be forced to lift wages
The Shop Distributive and Allied Employees Association (SDA) has secured a landmark Fair Work Commission (FWC) order forcing Chemist Warehouse franchisees in South Australia to bargain collectively, opening the door to higher wages and broader union coverage across the pharmacy and franchise sectors.
This makes Chemist Warehouse the first major retailer – and the first pharmacy operator – to be forced into multi‑employer bargaining under Labor’s new industrial relations laws, in a move that could reshape pay and conditions.
The FWC has ordered a group of Chemist Warehouse franchisees in Adelaide to commence bargaining with the SDA for a single enterprise agreement covering multiple stores.
The decision follows an application by the union seeking a Single Interest Employer Authorisation across eight Chemist Warehouse stores in Adelaide, representing at least 335 workers.
This latest deal received support from 300 workers across six franchisees, comprised of 13 stores.
From franchise shield to bargaining table
For years, Chemist Warehouse’s complex franchise structure has been seen as a major barrier to collective bargaining. Individual stores are run by separate legal entities, even though they are controlled by companies linked to the founding Verrochi and Gance families and sit under a single national brand.
The SDA argued this model has made it “near impossible for workers to bargain together.”
How the multi‑employer laws are being used
The Chemist Warehouse case is one of the first major tests of the Albanese Government’s multi‑employer bargaining regime outside government‑funded sectors.
The laws, coming into effect on 6 June 2023, were designed to give low‑paid workers with limited bargaining power the ability to negotiate collectively across multiple employers.
The SDA has pursued two different streams of the new regime in recent months, including Chemist Warehouse and McDonald’s.
The McDonald’s case led to orders for 18 South Australian franchisees to bargain for over 5,100 workers. The SDA has now applied to extend bargaining nationally to around 115,000 McDonald’s employees.
At Chemist Warehouse, the SDA has opted for the single‑interest stream, which does require majority employee support but contains an automatic “common interest” test for franchisees of the same franchisor.
Once the FWC is satisfied the majority of employees across the proposed employers want to bargain, it can compel those franchisees to negotiate a joint agreement.
Chemist Warehouse fought the SDA’s application, challenging the union’s petitions on the basis that some young workers were not properly informed about what they were signing.
FWC deputy president Peter Hampton noted aspects of the organisers’ explanation were “incomplete”, he ultimately found there were no “material misrepresentations” sufficient to overturn the apparent majority support.
The ruling could lay the groundwork for extension to up to 1,000 Chemist Warehouse outlets nationwide.
What’s at stake for workers and the business?
Unlike many other sectors, there is currently not a single enterprise agreement covering retail pharmacy workers nationally.
The SDA’s bargaining agenda at Chemist Warehouse is focused on:
- wage increases “that reflect skills and pharmacy‑specific responsibilities” rather than bare award minimums
- more predictable and fairer rosters
- stronger workplace rights, including protections around casualisation, breaks and job security
What happens next?
The immediate task now is for Chemist Warehouse franchisees in Adelaide to sit down with the SDA and attempt to negotiate a first‑ever collective agreement for retail pharmacy workers.
The union is simultaneously surveying and organising workers nationally, with an eye to expanding bargaining to more Chemist Warehouse outlets and, potentially, other pharmacy brands.
The outcome of those talks – whether a negotiated deal or an arbitrated determination – will be closely watched by employers, unions, policymakers and other franchised networks.
It will not only set a benchmark for wages and conditions in pharmacy retail; it will also be an early indicator of how far and how fast Australia’s new multi‑employer bargaining framework can shift the balance of power in low‑paid, highly franchised industries.
