Union deals cut Sunday penalties

The Australian, August 30, 2017

More than 410,000 workers are covered by union pay deals with big employers that contain zero or below-award Sunday penalty rates in return for higher base pay, according to new analysis that has re­ignited political brawling over workplace relations.

The Department of Employment found unions had 55 agreements with large companies in the fast-food, retail, hospitality and pharmacy sectors that remove­d or cut Sunday penalty rates but paid an above-award rate for ordinary hours worked.

In addition to deals at McDonald’s, Woolworths, Coles, Pizza Hut and KFC, the department said Bunnings, Big W, David Jones, Dan Murphy’s, The Reject Shop, Prouds, IKEA and Priceline were among employers that had deals with the shop assistant­s union paying below-award Sunday penalties.

United Voice also has agreements with the InterContinental hotels in Sydney and Adelaide, the Langham in Melbourne, the Sheraton Mirage on the Gold Coast and three Park Royal hotels­ that do not pay Sunday penalty rates to workers.

Employment Minister Michaelia Cash seized on the analysis to criticise Labor’s attacks on the Fair Work Commission’s decis­ion to cut penalty rates, despite the department acknowledging that each agreement contained higher hourly base rates and that its analysis did not assess hourly rates paid on other days of the week. She said employees who predominantly worked weekends would be “worse off” under many of the deals between the big companies and unions.

“Bill Shorten and the Labor Party pretend to be outraged when the Fair Work Commission adjusts award penalty rates for small business, but have nothing to say about big business paying lower rates under their agreements with unions,’’ Sen­ator Cash said.

“The Labor Party’s silence on these deals can only be explained by the fact they received millions of dollars in donations from the same unions who negotiate these agreements.”

The Shop Distributive and Allied Employees Association is one of the Labor Party’s biggest donors, contributing more than $1 million in 2015-16. United Voice gave about $714,000 over the same period.

The opposition’s workplace relations spokesman, Brendan O’Connor, said the agreements were certified by the Fair Work Commission as satisfying the Fair Work Act’s better-off-overall test (BOOT).

“The Department of Employment has itself conceded that the analysis does not ‘compare other terms or conditions in the agreement against the relevant modern award’,’’ Mr O’Connor said.

“Further, the department states that ‘each agreement ­listed that negotiated a lower ­Sunday penalty rate than the relevant award pays a higher hourly rate for ordinary time (base rate of pay) than the award rate’.

“The decision to cut penalty rates, which the Turnbull government supports, is just an unfair straight-up cut to wages — not traded for a better base rate of pay, not negotiated for improved ­conditions.”

ACTU secretary Sally Mc­Manus said Senator Cash’s claims were “politically motivated and based on misleading analysis”.

“This submission is based on a threadbare and deceptive analysis of these agreements,’’ Ms Mc­Manus said. “It ignores the benefits in the EBAs of higher hourly rates, above-award conditions and a range of protections for the impacted workers, all voted up by the workers.”

She said the Fair Work Commission’s penalty rate cuts would see workers’ take-home pay unilaterally cut: “This con job is a polit­ical attempt to point the finger at unions and distract attention from the Turnbull govern­ment’s failed economic theories, where wages are falling and ­inequality is rising.’’

Senator Cash said: “The evidence clearly shows that employees who predominantly work weekends will be worse off under a number of large union agreements than they would be working the same hours under the award. Any higher rates that might apply for weekday work will make no difference.

“The ACTU seems to have no problem with these workers being worse off, simply because a union was involved in the deal.”

As part of its submission to the Senate inquiry into penalty rates, the department analysed 108 agreements, finding that 70 deals covering 431,437 employees had a below-award hourly rate for hours worked on a Sunday. Fifteen­ of the 70 were non-union deals covering almost 18,000 employee­s, including workers at Grill’d, Vodafone, Estee Lauder, the Super Retail Group and RACV Club and ­Resorts.

University of Adelaide law professor Andrew Stewart said it was “hard to draw any firm conclusions­ from this data, because­ in any given agreement there might be sufficient benefits to offset the drop in Sunday rates for the most affected employees”.

“But I think it’s clear enough now from the available evidence that there are a number of agreements in this sector that should not have been approved by the FWC under the current BOOT,’’ Professor Stewart said.

“And this is not because there’s been any change in the appli­cation of the BOOT — there hasn’t — but rather because the FWC seems not to have subjected employer­ and SDA claims about the sufficiency of offsetting benefits to the scrutiny they deserved.”

United Voice national secret­ary Jo-anne Schofield said the penalty rates reductions handed down by the commission were a “pay cut with no other benefit to workers”. “There is an important distinction to make here … that arrangements such as those listed by the Department of Employ­ment are only in place when they have been negotiated by and voted on by the workers themselves and result in other benefits to the workforce,’’ she said.

“All agreements listed were approved by the commission. In many instances there are checks and balances within the agreements, such as limits on the number of Sundays, or internal audit process where employees can ask for a review against the award.”

SDA national secretary Gerard Dwyer said the key factors to consider when comparing awards with enterprise agreements were the weekly take-home pay and the package of conditions that workers received as a result of their agreement.

“A full assessment of the ­benefits that enterprise bargaining entail must include full consideration­ of the practice of rolling up penalty rates into higher­ base rates and superior working conditions, which has delivered strong above-award weekly wages for retail workers,’’ he said. “The rolling up of penalty rates has delivered retail workers weekly wages rates significantly higher than the award.”