Unions, backed by left leaning media, made a lot of noise when some Sunday penalty rates were cut last July. They claimed it was one more example of the common man taking a hit, so the fat cats could line their pockets.
But the Turnbull government has news for them.
It seems that penalty rates aren’t to blame for declining pay rates this time.
Workers are losing precious extra pay on weekends and public holidays due to conflict between businesses and unions, according to the Turnbull government.
The Fair Work Commission cut Sunday penalty rates for hospitality, retail, pharmacy and fast food employees in July last year.
The first round of cuts saw Sunday and public holiday work rates drop by 5%. But the full penalty rate reduction won’t be released until 2020.
In an effort to restore penalty rates for up to 700,000 workers, a private members bill lead by Labor leader Bill Shorten was put forward. The decision was initially backed by the Federal Court after a union challenge, but a Senate inquiry report last October called for it to be overturned.
The inquiry, conducted by The State Parliament’s Penalty Rates and Fair Pay Select Committee, revealed no evidence suggesting the creation of new jobs or increased working hours were a result from the cuts.
Instead, the report revealed that the 2017 cuts have created significant detrimental impact upon thousands of workers in these affected industries — namely women, young people and employees working in regional and rural communities.
‘The Fair Work Commission’s decision has come at a time when Australia has endured close to six years of stagnation, or minor increases, in wages,’ the report says.
Stagnant wages to remain?
And without change, the future looks dim. These penalty rate reductions will in turn result in wage reduction and stagnation for employees.
But despite the uproar, two Liberal members of the Committee, Robert Clark and Dee Ryall, have dismissed the government’s responsibility for the results.
‘This inquiry has been a blatant misuse of public funds by the Andrews government,’ Clark and Ryall said, as reported by the AAP.
‘While the issues involved are important, the Victorian Parliament and government have almost no role in them.’
Additionally, Liberal member Craig Kelly has said that bargaining agreements have put large unionised workforces at an advantage over smaller organisations.
‘It has nothing to do with penalty rates, it is about more union control, more union dominance across the workforce,’ Mr Kelly told the lower house on Monday.
But not all are convinced. Labor MP Terri Butler said the penalty rate cuts occurred under the Turnbull government’s watch, making it effectively responsible.
‘They have the chance now to fix it and they should,’ she said.
The inquiry has also stirred relations between the employers and workers of these struggling industries.
Public holiday surcharges going straight to owners pockets
Despite the decline in rates, many restaurants and cafes continue to charge weekend and public holiday surcharges without passing on wages to employees.
In an interview with ABC news, restaurant worker Harry Connor revealed that ‘there was no public holiday rate passed onto the staff, nor even a weekend rate passed onto the staff’.
For raising his concerns about his pay rate, as well as several other issues, management terminated his employment contract.
‘I’ve actually been told point blank by employers that this is how the hospitality industry is these days, like it or lump it.’
Regardless of sides, the inquiry has identified holes in the realm of fair pay and a close investigation is now inevitable.
Early last month, the Fair Work Commission announced a 3.5% increase in pharmacy award minimum pay rates in response to the uproar, with corresponding increases in hourly rates on the basis of a 38-hour week.
But there is still a lot more work to be done. The Committee is now urging on the federal government to restore order to the relevant awards, and to call upon legislation to restrict the Fair Work Commission from varying awards and reducing take-home pay in the future.
What will happen next? We’re interested to see.
Alice De Bruin
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