Penalty rate trade-off would scapegoat weekend workers: ACTU

The Australian, October 1, 2016

Unions will oppose small business attempts to trade off penalty rates and overtime for higher hourly pay, warning that weekend workers risked becoming “scapegoats” who subsidised their colleagues working Monday to Friday.

ACTU secretary Dave Oliver yesterday hardened the union movement’s opposition to the proposal by Fair Work Commission president Iain Ross to look at allowing award-covered retail and fast-food companies to trade off penalties for higher base pay.

Mr Oliver said negotiating so-called “loaded” rates was inappropriate at the award level and should be limited to enterprise agreements between unions and employers. He said any agreed loading must also be underpinned by tests to ensure no worker was disadvantaged.

“The ACTU will oppose any push to introduce loaded rates that will disadvantage retail workers,” he told The Weekend Aus­tralian. “Loaded rates would potentially make weekend workers scapegoats for their respective employers, as they would be subsidising weekday workers.

“Weekend work penalty rates are sacrosanct; there is never going to be a justification to strip them back.’’

Council of Small Business of Australia chief executive Peter Strong supports a single higher hourly base rate operating across seven days as a simple alternative to the existing system of penalty rates and overtime payments.

He said a “potential model” would be the hospitality industry award, which allows employers to pay 25 per cent above the weekly award rate in lieu of overtime and penalty rates.

Mr Oliver said “every time we have this argument, it puts working people’s pay at risk of being ­reduced”.

“How is that ever going to be justifiable?” he asked. “To say that penalty rates are the reason that businesses’ bottom lines are stretched is simplistic. To then suggest retail workers, who are mostly lower-paid, should be penalised when corporate tax cuts have been this government’s modus operandi … is insulting.”

Malcolm Turnbull refused to express a view on the proposal by Justice Ross, reiterating that the government believed penalty rates were a matter for the commission to determine.

The chief executive of the Australian Chamber of Commerce and Industry, James Pearson, said introducing a higher loaded hourly rate was worth further ­consideration.

“This may ease the administrative burden for some businesses and make it easy for them to comply with their legal obligations,” he said.

“The outcome needs to simplify employment arrangements and facilitate flexible arrangements negotiated between ­employers and their employees.”

Small businesses complain that they are disadvantaged by the current system, given major retailers struck contentious enterprise agreements with the shop assistants union that apply “loaded” rates to tens of thousands of ­workers.

The union’s national secretary, Gerard Dwyer, said the deals with retailers included loaded rates and penalty rates.