Penalty rate change: The arguments for and against
Updated
The commission has been hearing evidence from unions and industry groups on the matter since 2015.
So what were the arguments for and against the change?
So, give me the gist of the changes
In hospitality:
The penalty rate for full-time and part-time employees will be cut from 175 to 150 per cent.
There's no change to the Sunday rate for casuals which will stay at 175 per cent.
In fast food:
The Sunday penalty rate will be reduced for level one employees from 150 to 125 per cent for full-time and part-time employees and from 175 to 150 per cent for casuals.
There's no change to Sunday penalty rates for level two and three employees in that award.
In retail:
The Sunday penalty rate for full-time and part-time employees will be taken down from 200 to 150 per cent.
The Sunday rate for casuals will be reduced from 200 to 175 per cent.
In pharmacy:
The rate for full-time and part-time employees for work between 7:00am and 9:00pm on Sundays will be reduced from 200 to 150 per cent. The Sunday rate for casuals will be reduced from 200 to 175 per cent.
Arguments for the change
- It will allow employers to hire more staff
- More hospitality venues will be able to operate on Sundays
- It will provide a better experience for customers with more staff and availability of entertainment and hospitality venues
- Changes in technology and lifestyles mean we now live in a much more 24/7 world, where consumer expectations are greater
- Businesses would make more money from the increased opening hours and increased staff levels
- Prices could come down (not having to pay extra for eating at a restaurant on a Sunday)
A portion of people who work in hospitality study Monday to Friday, so working on Sunday is not as much of an inconvenience
Who wanted the changes?
The Productivity Commission:
In December 2015, it recommended changes to weekend penalty rates, calling for Sunday rates to be brought into line with Saturday payments.
It was part of its final report into workplace relations and said it would impact workers in retail, entertainment and hospitality industries.
It said:
"Penalty rates have a legitimate role in compensating employees for working long hours or at asocial times.
"However, Sunday penalty rates for hospitality, entertainment, retailing, restaurants and cafes are inconsistent across similar work, anachronistic in the context of changing consumer preferences, and frustrate the job aspirations of the unemployed and those who are only available for work on Sunday.
"Rates should be aligned with those on Saturday, creating a weekend rate for each of the relevant industries."
Small businesses:
Some argue they can't open on Sundays due to the high cost of wages for employees.
Others say it would allow them to employ more people if the penalty rate was dropped.
Russell Zimmerman from the Australian Retailers Association welcomed the news and said it would ensure there were more jobs available within the retail industry.
"For the people we represent, our retailers have told us quite clearly that they will be employing more people where they are already employing people on a Sunday and where they have shops closed on a Sunday, they will look at reopening the shops on a Sunday to ensure more employment throughout the industry," he said.
Arguments against
- It will take money directly from the pockets of people who work on Sundays, many of whom might already live week to week
- There are no guarantees employers will hire more staff
- The double pay is fair compensation for missing family events, playing sports and leading a normal social life
- Businesses like restaurants and cafes already have a high growth rate
- Those who were on double time on Sundays will be less likely to put their pay cheques back into the economy if they have to tighten their belts
- Wage cuts reduce income, and therefore, spending
- Casual employees with children will have less time at home
Who didn't want the changes?
Unions:
This morning Australian Council of Trade Unions president Ged Kearney slammed the decision.
"Today we have had a decision from the Fair Work Commission to cut the pay of the lowest paid workers in this country from up to $6,000 a year," she said.
"Cleaners, hospitality workers, retail workers, people who don't earn a fortune are going to have their pay ... cut off — everyday people.
"This decision will have a massive impact on household budgets of so many families. Nearly a million workers will be affected by this pay cut. Their families and their budgets and their livelihoods."
Workers:
The changes will mean a pay cut for many workers who work full-time and part-time in the above industries.
It could also lock out some casuals from working on Sundays, as full-time and part-time staff will now be cheaper to employ on those days.
Topics: business-economics-and-finance, industry, hospitality, retail, federal-government, australia
First posted
