![Fair Work Commission president Iain Ross has suggested a possible solution on penalty rates.](/content/dam/images/g/r/r/3/w/r/image.related.afrArticleLead.620x350.grrobi.png/1475158511765.jpg)
With all the attention on technology and competition, it is easy to forget the other issue holding back Australia's retail sector compared with rivals in many other parts of the world.
Australia's penalty rates system has long penalised retailers struggling to compete in a world of 24-hour shopping. Fair Work Commission president Iain Ross has raised a compromise solution to an emotionally charged debate that has been going nowhere.
He told The Australian Financial Review's retail summit on Thursday that weekend penalty rates for retailers and fast-food outlets could be traded off for a higher hourly rate.
This so-called "loaded" rate could be negotiated directly between an employer and employee.
![Fair Work Commission president Iain Ross has suggested a possible solution on penalty rates.](/content/dam/images/g/r/r/3/w/r/image.imgtype.afrArticleInline.620x0.png/1475139345393.jpg)
This has worked in parts of the hospitality industry, where an employer and staff can negotiate a deal to pay the normal weekly rate plus an additional 25 per cent in lieu of penalty rates and overtime.
Given penalty rates can be as much as double ordinary rates on Sundays, retailers would be wise to support a compromise. Getting unions on board will be tougher, although the national secretary of the Australian Council of Trade Unions, Dave Oliver, was not slamming the door on the idea.
He says there are many examples of industries with "rolled-up" penalty rates, although there would be issues for employees who were not working full-time or were working for shorter periods.
It is a divisive debate with no quick fix, but any moves that inject flexibility into a system without more red tape should be embraced.
Meanwhile, e-commerce entrepreneurs are not happy with suggestions at the summit from Australian Competition and Consumer Commission chairman Rod Sims that he would oppose tie-ups between big retailers and online rivals.