Despite taking heat from their left, Labor may be happy to see Sunday penalty rates talked about, writes Ben Eltham. Once again, penalty rates are on the agenda. Ever since WorkChoices made industrial relations the central issue of the 2007 campaign, penalty rates have popped up as a reliable Labor scare campaign. In 2010, forMore
Company leaders defend their huge salaries by saying bonuses incentivise CEOs to perform better. Doesn’t this same principle apply all the way down to the shop assistant and their Sunday penalty rate?
A new, more modern penalty rate system proposed by the Government this week would give those working in retail and hospitality the freedom they need to earn lower wages.
“I think over time you’ll see the transition to a more flexible workplace where employees in hospitality, retail and the like are given the opportunity to earn less,” Prime Minister Malcolm Turnbull said today.
He said workers would be paid less, but that no-one would be worse off. “I can run you through the maths of that if you like, but it’s pretty complex so perhaps just take my word for it,” he said.
Businesses welcomed the move to a lower Sunday pay rate, except 7-Eleven which said it would have to increase its wages ten-fold if the new rates are implemented.
Late night loading, which gives workers an extra 10 to 15 per cent per hour, could be stripped from the award. Photo: Tamara Voninski
Australian industry is mounting a concerted campaign to wind back and abolish weekend and public holiday penalty rates, particularly in the hospitality sector.
Employer submissions to the Fair Work Commission’s review of minimum wage conditions across the economy filed in the last weeks of the year reveal the hitlist for business groups, which argue they need greater flexibility and lower costs in the face of tough trading conditions.
The commission is reviewing more than 200 awards that provide minimum wage, hours and other conditions. As part of that exercise it is conducting a separate examination of penalty rates that will flow into a number of awards.
The push comes as the federal government has launched a review of industrial relations through the Productivity Commission
A particular focus is hospitality. The Restaurant & Catering Association used its submission to argue that the late night loading, which gives workers an extra 10 to 15 per cent per hour, should be stripped from the award.
RCA chief executive John Hart said he would also be looking to capitalise on a recent win in another case to push for standardised penalty rates across Saturday and Sunday across the industry.
“We are not arguing there shouldn’t be penalty rates, because the legislation says there has to be, it is now about arguing the quantum,” he said.
He said the union’s pitch in that case had been that working Saturdays was a hindrance to social life, because of children’s sport and other activities, rather than the importance of Sundays.
“They didn’t mount it around going to church. I think that bolsters our argument that Saturday and Sunday should be treated the same,” he said.
He said one-third of restaurant and catering businesses did not trade on Sundays due to high wages.
Jos de Bruin, chief executive of the Master Grocers Association, which represent independent supermarkets, said paying double time on a Sunday provided an “enormous cost burden on what is now becoming a normalised day to trade for our members”.
Mr de Bruin said a reduction from double-time – sometimes up to $50 an hour – to time and a half would allow small independent grocers to hire more staff and improve service.
“We are doing the best we can to cope with what we’ve got, but we’re at a cliff edge now,” he said.
The major retailers are yet to lodge detailed submissions but have consistently argued for the removal or winding back of penalty rates.
Many other business groups are also targeting penalty rate reductions. The Accommodation Association wants the loading for working public holidays cut from double time and a half to time and a half.
Clubs Australia complained that its penalty rates for Saturdays and Sundays were 25 percentage points higher than the restaurant sector.
The Australian Hotels Association and the Pharmacy Guild of Australia are also seeking unspecified reductions in penalty rates. The pharmacists argue that changing consumer patterns required change.
Australia’s biggest brickmaker, ASX-listed Brickworks, is one of the few companies to have so far made a direct submission to the broader review.
It wants its workers to start at 4am, instead of the usual 6am at present, without penalties and abolish weekend penalty rates. It claims to have the support of its 1500-strong workforce for the changes.
Brickworks managing director Lindsay Partridge said for many employees, working weekends and nights was no longer considered unsociable, and taking midweek breaks was preferable for some working families.
The sector was battling to keep prices down, particularly in the face of cheaper Asian-based competitor, but paying penalties on weekends and others was eating into the companies’ profits.
“The masonry business has been in decline over the past decade or more and we would hope these changes will improve the viability of the industry,” he said.
The company wants the abolition of a 3 per cent allowance it claims is outdated having been established in the 1970s to compensate for harsher working conditions.
Brickworks featured prominently in the Liberal Party fund-raising scandal in NSW last year over its donations to the party.
Stevedores Qube and DP World used a joint submission to argue for a substantial reduction in penalty rates including from a 250 per cent loading to 150 per cent for Sundays.
The employers have foreshadowed calling dozens of witnesses to support their case at hearings slated for later in 2015.
Australian Council of Trade Unions president Ged Kearney said the industries’ arguments that weekends should have the same value for workers as weekdays was “nonsense”.
“When employers talk about getting rid of penalty rates, they find any excuse, ” she said.
“Weekends are still highly valued by workers. They are still when weddings occur, and when children aren’t at school. I always say the day they play the rugby league grand final on a Tuesday, you can say weekends are no different.”
She said it was wrong to suggest penalty rates caused financial stress on business.
“Unless they can show, which they have to date failed to, an economic case that penalty rates adversely affect businesses, they have no case, and every commission has found that they do not have a case,” she said
Ms Kearney said the ACTU would strongly defend the penalty rates currently in place.