04/08/2015 - 13:49

Penalty rates key in reform push

04/08/2015 - 13:49


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A scaling back of penalty rates for hospitality and retail workers on Sundays was among the major recommendations in the Productivity Commission’s draft workplace relations framework released today.

The commission recommended weekend rates be simplified.

A scaling back of penalty rates for hospitality and retail workers on Sundays was among the major recommendations in the Productivity Commission’s draft workplace relations framework released today.

See also: Industry wants IR reform

Awards and penalty rates should be retained, the commission said, although they require improvement to address specific social and economic priorities.

Sunday minimum rates should be aligned with those on Saturdays for workers in cafes, hospitality, restaurants and retailing, with employers and employees able to negotiate higher rates at their discretion, the report said.

The report called for greater consistency in rates across those industries, too.

Employees would be able to “swap” public holidays to times that better suited them, while a new enterprise contract would be available for small businesses.

The report also took aim at the Fair Work Commission, arguing it was overly legalistic and required an infusion of new skills, suggesting that future decisions should be more based on analysis of evidence.

Contrary to concerns in some sectors prior to the release, there were no changes recommended to the minimum wage.

Employment Minister Eric Abetz said he trusted Labor and the union movement would have a genuine conversation about the proposals.

“The Productivity Commission has not recommended any changes to overtime, night work or shift allowances,” he said.

“This is consistent with the government’s stated approach to penalty rates that it is not for government to set or change penalty rates.

“Similarly, the draft report only recommends that the Fair Work Commission seek additional evidence when it sets the minimum wage in future.”

CCIWA chief executive Deirdre Willmott said she felt businesses would support the recommended changes to weekend penalty rates.

"Our members have told us they'd be able to open for longer hours on the weekend and would be able to provide more jobs if that Saturday penalty rate would be able to apply all weekend," she said.

Ms Willmott said the recent model agreement in South Australia showed that the union movement in that state had understood the impact of penalty rates on jobs.

UnionsWA secretary Meredith Hammat said the lobbying body would not support changes to penalty rates.

“It’s an insult to propose that hospitality and retail workers should be paid less than others for weekend work,” she said.

Under the current awards system, staff in professional services are generally not paid weekend penalty rates, while the rates vary dramatically across industries.

“Cutting the pay of low paid workers won’t necessarily create jobs," Ms Hammat said.

“What is certain is that pay cuts will hurt the working poor.

“Giving priority to lowering wages will drag down our economy.

“Well paid, secure, skilled jobs - that’s the kind of productivity the commission and Abbott government should be focusing on.”

However a 2007 research paper by Labor's assistant treasury spokesman Andrew Leigh highlighted that the results of wage regulation weren’t clear cut.

“It appears unlikely that raising the minimum wage will significantly lower family income inequality,” Mr Leigh said. 

Other changes

Australian Mines and Metals Association chief executive Steve Knott said its members would pleased with the outcome.

He said the new model for greenfields project negotiations, which included an extension of the expiry date for agreements, would improve industrial certainty.

Ms Willmott said the Chamber also supported a recommendedation to standardise the number of public holidays, after the Victorian state government recently announced it would add two new holidays.

That decision had prompted concerns among Victorian businesses about the economic impact.

The Commission recommended that new holidays not be paid at penalty rates.


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