01/08/2016 - 06:09

No-one wins from low-pay deals

01/08/2016 - 06:09


Save articles for future reference.

Penalty rates may be the bane of small businesses everywhere, but for now, at least, employers are legally obliged to pay them.

No-one wins from low-pay deals
SHORTFALL: Coles has left some workers out of pocket. Photo: Attila Csaszar

Penalty rates may be the bane of small businesses everywhere, but for now, at least, employers are legally obliged to pay them.

During a trip to the US some years back, I was invited to a rooftop spa party with a group of young, up-and-coming professionals.

It was a balmy LA evening, and on the way to the party I drove through the outskirts of one of the city’s poorest neighbourhoods.

I’ll never forget what I saw on that drive, including a young mother cooking on a small fire while her children chased each other around their make-shift home – a plastic sheet tethered to a cyclone fence.

I shared my dismay at the scale of LA’s poverty and homelessness with a young real estate agent at the party’s bar later on.

She didn’t share my concerns and, far from being worried by it, characterised it as the price some migrants have to pay to live in America.

“It’s still better than Mexico, right?” she said.

At the time, this complete lack of empathy cemented my view that the US and Australia were fundamentally different places, separated by stark differences in attitudes to welfare, workers’ rights and social mobility.

I still cling to the notion that Australia is a place where your destiny is not determined by your family or school.

Hard work underpins social mobility and anyone with enough determination and hard work can succeed.

We didn’t inherit the stifling class system of our colonialist forebears and have an open society that tends to take people at face value.

What I didn’t say to the assorted group of west coast Americans at that party was that the fundamental difference between Australia and the US was our social security safety net.

Through my youthful eyes, I saw the US as a country willing to tolerate an underclass – a broad grouping of poor, deeply disadvantaged people trapped by inequity and (often) injustice.

More recently, yet another wage scandal in Australia’s fast food sector has challenged my thoughts about the differences between the US and Australia.

Domino’s Pizza is the latest big name chain caught out not paying penalty rates, and it’s a similar story at McDonald’s.

Both of these hugely profitable brands have left their low-paid workers out of pocket thanks to deals with the powerful Shop Distributive and Allied Employees Association, one of the most powerful unions in the country.

The SDA has also been fingered in the Coles wage scandal and accused of negotiating a deal that has denied penalty rates to thousands of workers.

A similar agreement is in place at Woolworths.

At Domino’s, chief Don Meij claims the operation had been hard at work modernising its pay system for years.

But this is not a discussion about penalty rates; it’s a conversation about workers’ rights.

Businesses that don’t want to pay penalty rates need to spend more time lobbying politicians rather than striking cosy deals with unions to reduce their wages bill.

Coles, McDonald’s and Woolworths were exposed for paying staff the full penalty rates they have a right to under our laws; and the truth is, some of them are not receiving the basic award, which is supposed to be the safety net.

These are just the ones we know about. How do you think the thousands of overseas students who travel to Australia on student visas are faring?

Revelations of this type have changed the way I look at Australia because there’s an alarmingly large number of workers who are not being paid what they’re legally entitled to.

I look around me at lunchtime in the city and wonder how many of the people I see working in cafes and restaurants, in shops and takeaway stores are actually getting what they’re supposed to be paid.

In all likelihood penalty rates in retail and hospitality will be altered to recognise how many of us now shop on the weekend – a move I think is long overdue.

Sunday is now the biggest trade day for both the major supermarket chains, and that’s a big challenge in what is a fiercely competitive sector.

Penalty rates are anachronistic in many cases and stifle business growth; but for the moment they’re the law and large companies such as Coles and Domino’s should not be able to trade these rights away.


Subscription Options