Social

Our people

We are a major employer with more than 90 per cent of our 30,000-plus workforce located in Australia and the balance in New Zealand (see Figure 6). With the addition to our Insurance division of the OAMPS business in November 2006, we now have about 80 employees in the United Kingdom. A liquefied petroleum gas import terminal and distribution facility in Bangladesh, operated by a joint venture in which we are the majority partner, employs about 60 people. This year we paid out $1.3 billion in salaries, wages and other benefits.

We recognise the right of those we employ to negotiate individually or collectively with or without the involvement of third parties.

About 67 per cent of our employees are covered by collective agreements. We do not keep records of membership of trade unions or similar employee organisations. Our company believes in maximising the flexibility of arrangements available to employees and their managers. Some use is currently made of Australian Workplace Agreements but, as mentioned above, most employees are engaged under other arrangements and that is likely to continue to be the case.

At the end of the year under review, 90 per cent of permanent employees held shares in the company with a take-up rate of 99 per cent among eligible employees for the share scheme during the year.

Gender diversity remains an important issue. Around 44 per cent of our employees are women and women occupy 162 (14.7 per cent) of the company’s 1,102 management positions. At the senior management level (342 positions) there were 41 women, comprising 11.9 per cent of the total. At year’s end, our 15-strong Executive Committee had two women members.

We have policies which apply across the Group aimed at ensuring that each person has equal access to employment and the benefits of employment are based on the principle of merit. Each business unit is required to complete an annual report to the Equal Opportunity for Women in the Workplace Agency. These reports outline strategies implemented to enhance the representation of women in our businesses.

Given our autonomously-operating business unit structure, training is one of the issues within the direct responsibility of business units. But certain human capital development processes apply across the Group. These include remuneration of senior people, workplace discrimination and succession planning. More than 100 of the company’s most senior employees have their progress monitored as part of their personal development and the Group’s wish to retain key people.

Every two years or so we conduct a major conference at which senior managers from across the Group come together to discuss a broad range of issues with input from external and internal speakers. The next Best Practice Conference is scheduled for March 2009.

We have a Code of Ethics and Conduct that covers employee behaviour and while business units may adopt standards that best match their activities, they must embody the principles laid down in the Group Code, which is available on our website. The Code contains a specific provision to protect whistleblowers.

Safety

Workplace safety is one of our highest priorities. We believe we have an obligation to do all we can to ensure the safe return from their job of everyone who works for our company. Part of the remuneration of our managing directors and some of those who report to them is linked to the achievement of safety targets.

We have a Group target of reducing accident rates by 50 per cent each year towards a goal of zero. The primary measure we apply is the Lost Time Injury Frequency Rate (LTIFR) which is explained in the Glossary section at the end of this document.

For the second successive year, regrettably, there was a deterioration in the Group’s overall safety performance, as measured by the LTIFR. For the reporting period, the Group LTIFR was 10.6, up 10 per cent on the 9.6 for the previous corresponding period. There were 73 or 18.3 per cent more lost time injuries over the period. Total working hours increased from 41,499,303 to 44,759,515 or eight per cent during the year. As mentioned earlier in the report, safety data is adjusted to include time lost between 1 July 2007 and 30 September 2007 relating to injuries occurring before the end of June.

On a business-by-business basis, Wesfarmers LPG and Energy Generation maintained their zero LTIFR and Curragh, CSBP, the Industrial and Safety and Insurance divisions all improved. Details of individual business safety outcomes are found in Figure 7.

Details on the one fatality during the year are included in the Kleenheat Gas report.

While the LTIFR remains the main Group-wide measure of safety performance, operating businesses are encouraged to use a range of broader measures to promote a more proactive approach and support a culture of safe work practices. These include statistics on all injuries, near misses and restricted work cases. Full details are available in their individual sections.

Non-compliance/prosecutions

Bunnings was fined $123,750 after pleading guilty to a prosecution brought by the New South Wales WorkCover Authority relating to a forklift collision with racking at the Ashfield store in 2004, in which no injuries were sustained. A fine of $35,000 was imposed, with no conviction recorded, following a guilty plea by Bunnings to a prosecution by Queensland Work Health Standards relating to incidents involving injuries to truck drivers at the company’s former Caloundra frame and truss site.

Details of these matters are contained in the Bunnings report. Safety compliance records of our other businesses are covered in their reports.

Governance

In our Annual Report (available at www.wesfarmers.com.au) we provide a very detailed account of our governance structure. At the end of the reporting period, there were nine men and one woman on the Board. Mr Tony Howarth became the eleventh director when he was appointed in July 2007.

The Board has adopted a Charter which requires it to have a majority of non-executive independent directors, a non-executive independent Chairman and to have different people filling the roles of Chairman and Chief Executive Officer. The Board considers that eight of the directors are independent.

Three standing Board Committees (Nomination, Remuneration and Audit) review matters on behalf of the Board and make recommendations.

The company’s Market Disclosure Policy, which covers announcements to the Australian Securities Exchange, prevention of selective or inadvertent disclosure, conduct of investor and analyst briefings, media communication and other issues is supported by an education and training programme overseen and monitored by the Audit Committee.

Community contributions

The continuing successful operation of the Group’s businesses, in an ethical and socially responsible way, is the enduring cornerstone of our contribution to the community. Through the creation of employment opportunities and the flow of economic benefits to employees, shareholders, suppliers and by paying taxes to governments, we have a positive impact on society.

In addition, we believe in giving something back to the communities in which we operate by way of direct and indirect assistance to organisations and causes providing a public benefit. That support is delivered by way of direct donations from Wesfarmers Limited (the parent company) and by donations, sponsorships and other assistance from the Group’s businesses. In the 2006/2007 financial year, this amounted to more than $6.6 million (See Figure 8).

On top of this, Bunnings contributed to the raising of another $5.7 million for charities and other community organisations through the use of its stores to promote these causes and the efforts of its employees.

Under a policy approved by the Board, Wesfarmers Limited makes donations up to an annual ceiling of 0.25 per cent of before-tax profit. In deciding how to distribute these funds, we give preference to activities with a broadly beneficial reach. Medical research, health care and conservation featured prominently in areas to benefit in 2006/2007.

Our commitment to the Comprehensive Cancer Care Centre at St John of God Hospital in Western Australia continues, as does our support for the Australian Research Alliance for Children and Youth, the Great Southern Arc biodiversity restoration programme and the Western Australian Community Foundation. During the year we entered into a partnership with the Leeuwin Ocean Adventure Foundation (see Case Study).

Wesfarmers Arts

We have developed a national reputation for contributing to the arts through our award-winning Wesfarmers Arts sponsorship programme. Our commitment to the arts stems from a belief that a vibrant cultural sector makes a really positive contribution to the society in which we live.

This year, direct support totalling about $550,000 was provided to a range of leading performing and visual arts companies and organisations. In the area of indigenous arts, we were a major contributor to the Duyfken Aboriginal Print Portfolio. Commemorating 400 years of Dutch contact with Australia, the project commissioned emerging indigenous artists from Melville Island, Cape York, Western Australia and Tasmania to work at the Australian Print Workshop to produce a portfolio of limited edition prints. Following a national tour, Wesfarmers donated two portfolios to the Art Gallery of Western Australia and the Berndt Museum of Anthropology.

Our Commission Series with the Perth International Arts Festival culminated with the premiere of the opera The Love of the Nightingale. The production received critical acclaim, going on to extended seasons in Melbourne and Brisbane and winning four awards at the national Helpmann Awards. The Series involved the commissioning of four works encompassing dance, theatre, orchestral music and opera over four years from 2004 to 2007.

In November 2007, the Wesfarmers Arts Commission Series received national recognition when it was named Partnership of Year in the prestigious national Australia Business Arts Foundation Awards presented by Federal Minister for the Arts and Sports, Senator George Brandis.

Political donations

We believe that the democratic process is strengthened if political organisations, particularly those likely to be in a position to form government, have the resources to develop policy positions to put to the electorate. Financial contributions to parties can be made only by Wesfarmers Limited, not by any of our business units. During the year we donated a total of $100,000, split between the Liberal Party, the Australian Labor Party and the National Party. All donations are disclosed in November after the end of the financial year concerned to the Australian Electoral Commission which publishes this information on its website, www.aec.gov.au.