Unions move to lock penalty rates into Fair Work Act

Unions and employer groups look set for an election year showdown over workplace relations after ACTU secretary Dave Oliver called for the Fair Work Act to be changed to enshrine penalty rates as a minimum entitlement.

Speaking to The Australian, Oliver said the Act should guarantee penalty rates and shift allowances when staff work outside their standard hours, as well as compel employers to consider requests for family-friendly hours.

Oliver added that the union movement should consider a trade-off where loadings for weekends and public holidays would be cut in return for portable schemes that would allow non-permanent staff to take sick, annual and family leave entitlements to new roles.

“There should be a minimum standard to ensure that penalty rates are protected because we have seen what’s been happening now with employers, we’ve seen what (independent senator) Nick Xenophon’s running with out there, and we’re not confident that if there’s a change of government, as well, what’s going to happen in regards to that,” he told The Australian.

However, Russell Zimmerman, executive director of the Australian Retailers Association, says penalty rates should be wound back, rather than reinforced, due to changing working patterns.

“I talk to some people who work on weekends and they laugh at the idea of getting 100% penalty rates,” he tells SmartCompany. “We’ve got to realise that society has changed, we are no longer living a Monday to Friday life – even the banks are open on weekends now.”

“I can accept that there maybe needs to be some recompense for unsociable hours, but retailers just can’t afford crazy penalty rates of 100%, paid on top of $20 an hour.”

“We will work with whoever is in government next year but we would be disappointed if the current government doesn’t let Fair Work Australia make these decisions. That is what it was set up for, after all. We have gone through a process with Fair Work Australia and we’d hope that the government wouldn’t make any decisions beyond that which makes life difficult for employers.”

Zimmerman adds that the ARA would consider some sort of trade-off in workplace relations, but only if penalty rates were ultimately scrapped.

“When you look at the US, they don’t have penalty rates and they have half the rate of pay that we have here,” he says. “Now, I don’t think we want to bring people down to $9 an hour, but things like a commission-based approach to pay to increase this is worth looking at in the long term in order to keep us competitive.”

“Some of the portable schemes may have some merit, but we need more detail before we can start talking about trade-offs.”

Zimmerman adds: “Any legislation around flexible working hours would make life very difficult for retailers. Employers look for good employees and will do anything to keep them, including being flexible with working hours.”

“But we know Saturday and Sunday are very busy times, so employers must be able to request that employees do one in three or one in four weekends as a condition of the job. They are there to service the shopping patterns of consumers, after all.”