10/07/2015 - 13:59

Governments have little appetite for awards reform

10/07/2015 - 13:59

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Calls for reform to penalty rates are likely to grow louder following last month’s rise in unemployment in Western Australia.

Governments have little appetite for awards reform

Calls for reform to penalty rates are likely to grow louder following last month’s rise in unemployment in Western Australia.

At a national level, employer bodies have had the penalty rate system in their sights for years, with tourism and hospitality sectors among the most prominent in the push for change.

In the west, their case will be bolstered by last week’s unemployment figures, which revealed the unemployment rate rose to 5.8 per cent in June, up around 0.7 percentage points on the previous month, according to the Australian Bureau of Statistics.

Those seeking reform have claimed that high penalty rates in particular increase youth unemployment, with many young people aiming to work weekends and outside of business hours due to study commitments.

It is at those times that penalty rates will kick in, with rates such as 50 per cent on a Sunday for fast food outlets and restaurants, or 100 per cent for hairdressing and general retail.

And while business groups have been lobbying government about the need for reform, there is little appetite for meaningful action, particularly from the federal government.

At a state level, however, South Australia has been ahead of the pack; although with mixed success.

Earlier this year, an agreement between the state’s Chamber of Commerce and Industry, Business SA, and the SA branch of the Shop, Distributive and Allied Employees Association was heralded as a game changer in labour relations, with an agreement covering more than 40,000 employees enabling businesses to cut penalty rates in exchange for a higher base rate of pay.

But not a single business has signed up to the new model.

Business SA chief executive Nigel McBride reportedly said companies had felt the marginal gains for businesses embracing the deal wouldn’t be worth the costs and risks.

He said the system needed a national overhaul, with rates more “sensible”, rather than calling for their abolition altogether.

Former Labor minister Martin Ferguson is another advocating reform, in his role as the new head of Tourism Accommodation Australia.

Mr Ferguson reportedly plans to negotiate a similar deal as that in SA with the union movement for the tourism industry, reducing penalty rates while lifting conditions for permanent workers.

In the meantime, the Productivity Commission is expected to release its draft report into the national workplace relations framework in early August.

National complexity

The national system of penalty rates and awards is complex, with the economy split into more than 100 different industries to be covered by the mandated conditions.

Ports are covered by a different award system from coal export terminals, while road and rail transport fall under numerous separate awards, according to the Fair Work Ombudsman.

Among those frequently claimed as hardest hit by the legislation, hospitality operators will pay different conditions if they operate a restaurant as opposed to a fast food operation, and will deal under different conditions again if they run an alpine resort.

Hospitality generally also has an award, while clubs are under a further set of rules.

There are a variety of different awards for the agricultural sector, including for timber, silviculture, aquaculture, seafood processing, poultry processing, wine, wool storage and pastoral work.

Business News has compiled a snapshot of the numbers covering different industries.

Those industries that traditionally employ people on weekends, such as hospitality and retail, would be more likely to have rates more favourable to employers, according to HR consultancy WCA Solutions principal, Heather Warner.

“Standard office-type businesses, or even businesses that are typically just a Monday to Friday business, will have the higher penalties for working on a Saturday or Sunday,” Ms Warner said.

She said there were some anomalies, however, including in allied health, where physiotherapy and medical practices, despite their hours, were governed by different awards.

Industries that have stronger representation, either for employees or employers, would generally tip the balance in some way, Ms Warner said.

“Industries that are highly organised either from a labour point of view or an employer point of view will tend to have negotiated better conditions for their side of things,” she said.

“That’s a historical situation (that existed) well before the Fair Work Act.”

Nonetheless, she said the Act had greatly modernised the system.

It had previously been the case that further differences would exist within industries, or with mandates split geographically, some by state and some even down to local government areas.

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