Cuts to Sunday penalty rates phased in four years

Alana Matheson, the Deputy Director of Workplace Relations at ACCI, talks about changes to penalty rates

Introduction – penalty rates phased four years

Ross Greenwood: Welcome back to Money News right around Australia. Well, true to its word the Fair Work Commissioners today come out with rulings in regards to penalty rates. What will occur is changes to weaken penalty rates in several industries are basically going to be phased in over four years. Unions aren’t happy, they say, they and Labour party campaign on this all the way up to the next election. Also, to be fair to say, that employers are not especially happy about this because retailers say it should be coming in next week. That is also that say, for example, even the tourism industry today was saying it should be happening A-S-A-P.

Say, Russell Zimmerman, Head of the Retailers Association, retailers wanted this phased in much more quickly so we can get on with the job of employing more people. That’s what’s taken place today. As I said it’s going to be an election issue there is no doubt. Let’s go to Brendan O’Connor, who is the education and Workplace Relations Shadow Minister. Here is what he had to say today.

Brendan O’Connor: Their wages are falling over this period, at a time where we have the lowest rate growth in our generation. Cost of living questions are such that people are struggling to make ends meet.

Ross: Shadow Education and Employment Minister, Brendan O’Connor there. That’s go now to other bits and pieces because do bear in mind, remember, the Labour Party is going to oppose this. The unions have again today said that the government has basically got three weeks to knock this over, otherwise there will be action that will be taken by the union. There’s threats already out there by the ACTU today as this decision was made. Let’s go to Bill Shorten, last April talking to my colleague Neil Mitchell on 3AW about what would happen when this decision was handed down.

Neil Mitchell: Will you accept their findings given this is an independent body assessing penalty rates for Sunday, if you’re Prime Minister, will– you’ll accept them?

Bill Shorten: Yes.

Neil Mitchell: Even if they reduce Sunday penalty rates?

Bill: Well, I’ve said I’d accept the independent tribunal.

Ross: Okay. That’s what took place. Do bear in mind and when you go back when Justice Iain Ross AO, was appointed the new president of Fair Work Australia, who was the person who put that press release out? It was Bill Shorten, who was the minister at the time. What else did he have to say? He said, “I’m confident that under Justice Ross and his team the Fair Work Australia will continue to build on its excellent reputation for an impartial arbitration, expect advice on workplace relations issues, an important role in strengthening the Australian economy and the practical enforcement of entitlements for employers and employees.”

Bill Shorten should not be laid off on this. Because the fact is, he appointed Iain Ross, he agreed about the impartiality of the Fair Work Commission. Iain Ross will remember also was not only the chair of the Australian Council of Tribunals at the time but also, he’d held positions with the Australian Council of Trade unions and the Law Reform Commissions in New South Wales and Victoria. In other words, the Fair Work Commission here has done what Bill Shorten as the Minister, when he appointed Iain Ross set out to do.

That is to independently assess the issues as I came along as they have done the penalty rates and make decisions. The fact that both the retailers and employers are not happy and also the unions are not happy should speak volumes. Let’s now go to Alana Matheson, who was the Deputy Director of Workplace Relations at the Australian Chamber of Commerce and Industry. Alana, how do you rate at this stage?

Interview with Alana Matheson

Alana Matheson : Thanks Ross. While delaying the reductions are going to delay the benefits, we do accept the Fair Work Commission decision on transitional arrangements. This again has to be borne in mind, that I’m coming to their decision to reduce penalty rates, they did consider over 140 witness statements, across 39 days of hearing, was a 560 odd page decision. On top of that there were volume and volumes of evidence that were put to the commission. We do really believe this is an important decision.

But we’re a little bit disappointed that delaying the reduction by up to as you said, four annual wage review cycles, is really going to start to delay the benefits that we expected this decision to have. We need to look at the special circumstances confronting industries impacted by this decision and the people that they employ. We’ve got retail, for example, which is under fierce competitive pressure at the moment. These industries are major employers of young people as well. Collectively retail, accommodation and food services employ 770,000 young people.

Now, we’ve also got another 280,000 young people out of jobs. I think we need to face facts. We need to be creating jobs for young people in the current environment and pulling all levers to do that because where else are they going to get entry to the labour market if those jobs don’t exist?

Ross: Just another issue in regards to this. Can you just take me also to the fact that at least it is coming in. Now, you may not be happy about how quickly it’s coming in but the point is, say for example, in the retail and pharmacies sector Sunday penalty rates will be cut from 200% or 150% but that will be staggered out until 2020, so we’re talking three years’ time there. Fast food employees will have 150% Sunday rates cut over the next three years. Hospitality workers their Sunday pay will gradually fall from 175% to 150% over that period of time. You might talk about the number of people employed in those industries but ultimately employers are getting what they wanted.

Alana Matheson : Yes, over a very long period of time. I suppose that is a fact but to put it into perspective, yes, from July 1 next year, a retail employee level one will still be paid almost $38 an hour or over $300 a day on a Sunday, which is still nearly $150 more than what they currently paid for working on a weekday. There are incremental changes, suppose the concern that we have is that the longer this decision is phased in, the longer it will take for the benefits to flow to consumers, small business operators and the people that are taking more work opportunity.

Ross: That’s going to be interesting to watch exactly how it goes. We’ll certainly take people’s calls on that. Is this a decision you want? Obviously, it’s going to be opposed by Labour potential of the grains as well. It might have some difficulty getting through. It’s actually a decision of the commission that’s got through. The question is now what happens politically? That’s going to be the big issue to watch. Alana Matheson, Deputy Director of Workplace Relations at the Australian Chamber of Commerce and Industry. Appreciate your time here on the program this evening.

Alana Matheson : Thanks Ross

Interesting article relating to Penalty Rates

05-07-2017 Casuals have the right to become permanent employees

28-06-2017 Bill Shorten to save Sunday penalty rates

06-06-2017 Minimum wage to increase by 3.3%

06-06-2017 Money Minute – June 6 2017 Penalty Rates Cut

05-06-2017 Cuts to Sunday penalty rates phased in four years

29-05-2017 George Christensen wants to keep Sunday penalty rates

29-03-2017 Increasing the Minimum Wage – James Pearson, CEO Chamber of Commerce

27-03-2017 Pauline Hanson threatens to go on strike

14-03-2017 Franchising and Penalty Rates – Bruce Billson

10-03-2017 Inquiry into penalty rates

02-03-2017 A solution to the penalty rates problem

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01-03-2017 Australia has avoided a recession, says Treasurer Scott Morrison

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