The Fair Work Commission this morning announced that Sunday penalty rates will be reduced for retail, hospitality and fast food workers. Public holiday rates will be reduced as well.
Industry stakeholders, employees, politicians and the union movement have been eagerly awaiting the decision, which has been open for deliberation since 2015 when the Fair Work Commission made its first recommendation to reduce Sunday penalty rates in line with Saturday rates within the industries.
When are pay cuts popular?
No one likes to be paid less, and bitter opposition to the proposed cuts was inevitable, particularly being low-income occupations.
Malcolm Turnbull’s move to support the Fair Work Commission’s decision without actively opposing the rate cuts handed the ALP and the union movement significant political ammunition, which Bill Shorten has used to attack the Government on the issue since 2015.
Who is affected?
Business groups argued ‘adjusting’ penalty rates will result in small businesses offering more work and better customer service, which makes it difficult to deny the conversation.
Penalty rates have been crippling to many small business owners, many of which can no longer justify opening their doors on Sundays.
Many student employees and mothers re-entering the workforce will undoubtedly miss the higher rates. Teamed with stagnant annual wages growth figures, rate cuts will arguably put more pressure on vulnerable Australian workers.
The underlying agreements?
Most big players in the retail, hospitality and fast food industries are currently operating on enterprise bargaining agreements that exclude or reduce Sunday penalty rates, which means that most businesses paying penalty rates are small to medium in size. It is worth noting that these EBAs are union-approved.
National Retail Association chief executive Dominique Lamb said penalty rates in the retail industry were hindering small business growth.
“The businesses this decision will affect are the small-to-medium businesses that are the engine-room of the economy, and many of whom have simply had to abandon Sunday trading altogether because they just couldn’t find a way to make it viable when paying double time,” she said.