Reversal of the Fair Work Commission's decision to reduce Sunday penalty rates in industries including the hospitality and retail sectors could lead to industrial "chaos" and reduce wages to a political "plaything" experts warn.
Australian Industry Group chief executive Innes Willox said Labor Party leader Bill Shorten's pledge on Tuesday to reverse the decision if his party wins the next election would undermine wage fixing and undercut the industrial relations system.
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Shorten makes penalty rates election pledge
For the first time, Opposition Leader Bill Shorten makes an election promise to legislate against the Fair Work Commission's move to cut Sunday penalty rates.
"It would be a retrograde step," he said.
"What you would have is an umpire whose decisions were open to political interpretation and that cuts both ways. You would have an umpire then who would only be able to make a decision in the favour of one side rather than the other.
"So it would be about how much do we increase wages rather than what is the broader consideration around wages and conditions. It would mean that any decision that the commission took on any issue would be open to political interpretation or pressure."
Mr Willox said the Fair Work Commission was established as an independent umpire and employers were frequently rebuffed.
"And we accept that because that's an umpire's decision," Mr Willox said.
"But because you have one decision go against you, to overturn the entire system would be a very retrograde step and has the potential to ultimately lead to chaos."
In a speech to the Australian Council of Trade Unions on Tuesday, Opposition Leader Bill Shorten promised Labor would overrule the independent workplace umpire and legislate to fully restore Sunday penalty rates if it wins the next election.
The reduction in Sunday penalty rates will begin rolling out this weekend for workers across the retail, fast food, hospitality and pharmacy industries.
"I promise you this: a new Labor government will restore the Sunday penalty rates of every single worker affected by this cut. And we will change the law – to protect the take-home pay of working Australians into the future," Mr Shorten said.
Political plaything
Professor John Buchanan, from the University of Sydney business school, said many workers in Australia's growing low wage sector rely on penalty rates to help make ends meet.A cut in wages would have little impact on employment and hours worked, but would severely reduce living standards.
If labour standards become increasingly the plaything of politicians we all lose.
Professor John Buchanan
"The commission clearly made a very bad decision on this matter," he said.
"The issue is: what do we do now? Undermining the authority of the Fair Work Commission is not desirable. If labour standards become increasingly the plaything of politicians we all lose – especially the most vulnerable."
Professor Buchanan said it would be better to campaign to ensure compliance with current standards and improve compensation and protections for people who work anti-social hours.
'Exceptional' move
Labor's employment spokesman Brendan O'Connor said the decision to overrule the Fair Work Commission was exceptional.
"We do support the Commission but on this occasion Labor will stand with workers at a time when wages are their lowest in more than 20 years," Mr O'Connor told Fairfax Media.
"We think it is only fair that we prevent workers' wages falling at a time of growing inequality.
"We make no apology for it, it is the right thing to do."
Mr O'Connor said the Turnbull government had abolished an independent decision to increase the wages of truck drivers and had interfered with the Victorian Country Fire Authority industrial matter.
"The Prime Minister on two occasions has used the parliament to intervene on independent umpire decisions. On this occasion when it comes to stopping wages going down he wants to argue on principle he cannot intervene on an independent umpire's decision. We would say that is manifestly hypocritical," Mr O'Connor said.
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