The Coles Warehouse Lockout Is a Front-Line Struggle in the Battle Over Automation

Australia’s biggest supermarket chain has locked out its warehouse workers in New South Wales. The lockout is the first battle in a coming war over who will benefit from automation — solidarity with the Coles workers is vital.

Australian supermarkets like Coles are on the front line of the latest wave of workplace automation, which is leading to job losses and site closures. The outcome of this battle will set an important precedent for other industries going through the same process. (Wikimedia Commons)

On the morning of November 18, 350 Coles warehouse workers in Smeaton Grange, New South Wales began a rolling twenty-four-hour strike. Within hours, the supermarket giant responded by locking them out for a period of three months. At time of writing, the battle has lasted for over a month.

The lockout revolves around an automated “smart” warehouse being built by Coles. The company won’t allow long-serving workers to be redeployed to the new site. In response, the workers are seeking five weeks of redundancy pay for every year of service, capped at 104 weeks. This would mean that someone who has worked at Coles for more than twenty years would receive a maximum of two years’ pay once the site has been automated.

Australian supermarkets like Coles are on the front line of the latest wave of workplace automation, which is leading to job losses and site closures. The outcome of this battle will set an important precedent for other industries going through the same process.

Unity Against Disposability

Some workers at the Smeaton Grange warehouse have been with Coles for more than thirty years and want the opportunity to work at the new warehouse. As one locked-out worker explained:

We know the world is going this way with automation . . . but they are putting us out into an economic recession. This is really a fight for our future and trying to retire with some respect. A lot of these guys won’t get another job after this. The new shed is automated, but it still needs people, so why not us? We’ve made Coles a lot of money, and this is how they treat us now?

Coles claims that the demands of the workers are unreasonable. Yet their tactics suggest a vicious, anti-worker agenda.

A lockout is a work stoppage initiated by management intended to bar workers from their own jobs. The use of this tactic is quite rare in Australia’s labor history. One exception was the 2011 dispute involving Qantas, Australia’s leading airline. Qantas CEO Alan Joyce took the unprecedented move of grounding planes and locking domestic workers out amid ongoing industrial action. Within two days, the federal government had intervened to end the lockout.

However, there are signs that lockouts will become more frequent. In the United States, they are already on the rise as strike rates continue to fall. The trend reflects both increasing employer militancy and their indifference to public backlash over how workers are treated. High-profile lockouts have become common in professional sports, production sites, hospitals, and universities.

Australian firms have typically preferred to maintain a public image — however insincere — as worker-friendly and nonhierarchical. However, US-style trends are starting to manifest themselves.

Historically, working at Coles was seen as an attractive and secure job. It was once Australia’s largest private-sector employer: for many people, working life began with a stint stacking the company’s shelves or on a Coles checkout. Now, Coles is trading its brand reputation for greater power over workers and the supply chain.

Long-term Coles workers have noticed a dramatic cultural change in recent years:

Twenty years ago, I came in early and stayed late because I wanted to. I loved working here, we all did. But it’s not like that anymore. Now it’s all about money with them. Coles don’t care about us at all. A lot of people have mental health issues from the stress of the pick rates — and now because of the site closing. I told them I’m really suffering, and they flicked me a card with the EAP (Employee Assistance Program) number, and that’s it.

Pop-Up Warehouses and the “Amazon Effect”

During the pandemic, Coles established “pop-up” warehouses across strategic areas, ostensibly to cover surges in demand fueled by online shopping during statewide lockdowns. These warehouses draw upon large reserve armies of labor-hire casual workers.

Deliveries are carried out by gig workers rather than by in-house drivers or traditional third-party logistics companies such as Australia Post or Toll. For example, Uber Eats now offers grocery delivery services. Coles’s iconic red trucks, driven by unionized workers, are being replaced by nonunion gig workers in unmarked sedans.

The supermarkets have claimed that traditional supply chains were incapable of handling the increased demand. But some Coles workers weren’t convinced. They argue that it was an anti-union strategy:

We’ve worked through the bushfires, floods, the pandemic, everything. We were ready. We had the capacity to do everything here — but the bottom line is they wanted casuals on twenty-something dollars an hour. So they set up new sheds to get around us. They are wasting millions of dollars on those sheds, just to get around the union.

While the robotized warehouses of Walmart and Amazon have captured the public imagination abroad, in Australia, the supermarket giants Coles and Woolworths are leading the charge. Already, Australia’s grocery industry is among the most concentrated in the world. Between them, three firms — Coles Group, Woolworths Group, and Aldi — account for approximately 70 percent of market share.

Coles and Woolworths are racing to implement smart warehouses that draw upon consumer data, predictive analytics, and advanced robotics to manage supply chains and solve the “last mile” problem — namely, reducing the cost of delivery to customers’ doors. This is a key consideration in meeting next-day delivery targets, a growing consumer expectation that was, until recently, unheard of in Australia. Industry leaders call it the “Amazon effect.” Amazon may not yet be a big player in Australia’s e-commerce industry, but the symbolic power of the company’s brand still looms large, spurring local actors to act preemptively.

Of course, Amazon is not entirely to blame for Australia’s shifting industrial relations landscape. According to Coles warehouse workers, technological changes that undermine job security started coming in about a decade ago, with headsets and GPS-enabled scanner guns:

Before, you just did your work and that was that. That all changed with the headsets and the (scanner) guns. Now they know exactly where you are and how long it’s taking. If you take too long, maybe going to the toilet or something like that, they call it an “event gap.” If they want to target you, they find event gaps and you’re on the hook.

Automation Anxiety

Oppressive workplace surveillance and work intensification go hand in hand. Locked-out Coles workers report dangerously fast pick rates, with workers regularly moving tons of packages each shift. Workplace injuries such as hernias are commonplace. And casualization only worsens the picture. As one worker explained:

Safety goes out the window when I’m working with casuals who are running around trying to meet those pick rates. When I slow down [my forklift] to avoid hitting one of them, I get pulled up for “idle time,” and I have to answer for that. People think anyone can do this job, but it requires a lot of experience.

These developments are far from inevitable. As the critical historian of science and technology David F. Noble highlighted decades ago, the drive to automation greatly favors innovations that take decision-making power away from workers and hand it to management — or increasingly, to algorithms and machines.

Coles workers estimate that the new smart warehouse will need fifty to one hundred workers. However, the company has prohibited long-serving workers from applying for these roles because the company wants a lower-paid, precarious workforce.

Since the Industrial Revolution, at least, narratives about the future of work have been dominated by the threat of technological unemployment. “Rise of the robots” dystopias were undoubtedly overstated — but large swathes of workers are at risk of job loss or underemployment.

However, it is not technology itself that is to blame. Rather, the culprit is a stagnating global economy and managers who pursue profits with increasingly hostile anti-worker strategies. This is why, as the political economist Aaron Benanav observes, we are seeing the reemergence of automation anxiety as a symptom of our era, one in which the global economy is failing to create sufficient employment opportunities.

Wages Are Not Enough

Recent, as-yet-unpublished research led by Australian Catholic University academic Dr Tom Barnes has developed a five-year longitudinal study of Australian warehouse workers who experienced site closure due to automation.

Take, for example, former workers who regained employment after the 2019 closure of the Woolworths Hume Distribution Centre in Melbourne’s north. They found that their once-permanent jobs had been overwhelmingly replaced by labor-hire or agency-based precarious jobs. Before the closure, 43 percent of surveyed workers were permanently employed. One year afterward, this figure had more than halved — only 21 percent of re-employed workers had a secure job.

Wages also dropped precipitously. Previously, the average fortnightly wage was $2,064. Because of a reduced hourly rate and underemployment, one year later, it had dropped to $840 per fortnight.

As employers gain power, workers lose it. So long as this is the case, the benefits of technological innovation will not be equally shared. Asset-rich companies like Coles will grow wealthier, while wages as a share of company profits will decline.

The 350 locked-out Coles warehouse workers understand this situation intimately, and they know the stakes are high. By fighting for redundancy pay, they are challenging the dictatorial power of management, exercised via automation.

They’re also contesting the assumption that a redundancy payment is a parting gift from the employer — a farewell bonus. It’s not. It’s just a fraction of the value that workers have created over the space of many years.

The locked-out workers know they deserve everything their labor has created — fair redundancies are just the beginning. Like Coles, they are fighting to shape the future, defending not only their own interests, but those of all Australian workers.