Read The Times Australia

Daily Bulletin

Labor wants to restore penalty rates within 100 days. But what about the independent umpire?

  • Written by: Anthony Forsyth, Professor of Workplace Law, RMIT University
The Conversation

This article is part of an election series on wages, industrial relations, Labor and the union movement ahead of the 2019 federal election. You can read other pieces in the series here, here and here.

Labor has promised to restore the penalty rates cut by the Fair Work Commission in its first 100 days.

From its point of view, as part of a broader attack on the Coalition’s record on industrial relations, wage stagnation, widespread wage theft and the growth of insecure work, it makes sense.

But it betrays a broader principle Labor holds dear - independence of the tribunal.

The Coalition is saying little about it – still spooked by the electoral poison wrought by its WorkChoices legislation more than a decade ago.

Throughout the campaign it’s been happy to fall back on claims about economic growth and tax cuts creating favourable conditions to lift wages generally.

So what did the Fair Work Commission decide about penalty rates back in 2017, and what has occurred since?

The commission’s decision was limited

The cuts to penalty rates are often discussed as if they applied across the board. They didn’t. The commission’s decision affected penalty rates in the federal awards applying to only six sectors: fast food, retail, hospitality, pharmacies, clubs and restaurants.

It determined that the penalty rates for working on public holidays in those awards would be reduced from July 1, 2017; and that the penalty rates for Sunday work in four of the awards would be phased down over four years. For example, full-time workers on the retail award had their Sunday rates cut from 200% of the normal rate to 195% in July 2017, then to 180% in July 2018, and were to have the cut to 165% in July this year, followed by a cut to 150% in July 2020.

Read more: Myths about penalty rates and those who rely on them

Extra payments for working irregular or unsocial hours are a longstanding feature of Australia’s industrial relations system. Traditionally, penalty rates have been included in awards with two objectives in mind: to compensate workers for having to work overtime or on weekends and public holidays, and to deter employers from requiring employees to work at these times.

However, in reaching its decision, the commission found that the deterrence objective was no longer relevant for public holiday or Sunday penalty rates.

Sundays have become less sacred

The finding followed a report of the the Productivity Commission that found that working on Sundays was far more common than it had been in industries such as hospitality, restaurants and retail. This reflected a broader shift to a “24/7 economy”.

In the Fair Work Commission’s word, the “disutility” endured by workers employed on Sundays was less than it was.

Labor and the union movement have strongly criticised the commission’s decision in the two years since it was handed down. Labor very quickly introduced a bill to override it and restore the penalty rates of the 700,000 affected workers. The government opposed it and a similar bill introduced by The Greens, enabling Labor and the unions to hammer the prime minister in the election campaign for “voting eight times” to cut penalty rates.

Labor has argued that over the recent ten-day Easter and Anzac Day break, the penalty rate cuts resulted in a loss of between $218 for a fast food worker and $369 for a pharmacy employee.

The union/Labor-aligned McKell Institute says workers will be $2.87 billion worse off by the end of the scheduled reduction in penalty rate cuts if the Coalition is re-elected.

But cutting penalty rates has created few jobs

Business groups have long claimed that cutting penalty rates will boost employment levels, a position endorsed by both the Productivity Commission and Fair Work Commission. However, research published by the Australia Institute last year finds that the retail and hospitality industries were among the lowest industries for job growth in the year after rates were cut.

The Council of Small Business Organisations conceded two weeks ago that the cuts failed to create one new job. Its chief executive, Peter Strong, said the impact had been minimal because it had coincided with above average increases in the minimum wage.

“There’s no extra jobs on a Sunday,” he was reported as saying. “There’s been no extra hours. Certainly, I don’t know anyone (who gave workers extra hours). It’s been just a waste of time.”

However, the Fair Work Commission is set up to be independent.

Labor’s approach carries longer term risks

A campaign spokesperson for the Liberal Party was quoted in the New Daily last month saying: “‘Bill Shorten knows it is the independent Fair Work Commission that sets penalty rates, not the government. In fact, it was Bill Shorten … who set up the review into penalty rates. He even appointed the umpire.’”

The Coalition is gilding the lily. It has been no great defender of the industrial tribunal’s independence in the past. Under WorkChoices it sidelined the commission completely. Lately it has stacked the commission with employer representatives.

Read more: Bill Shorten's promise of a living wage is both realistic and necessary. But it's not enough

But it’s not a great idea to start overruling Fair Work Commission decisions that are unpopular. Yes, the penalty rate cuts are arbitrary, reducing the take-home pay of low-paid workers. But Australians have trusted the tribunal to make those judgment calls for more than 100 years.

If Labor wants to influence Fair Work Commission decisions, it should change the criteria used by the commission to review awards – it plans to do so as part of its promise to turn the minimum wage into a “living wage”.

Overturning decisions it doesn’t like will leave the Fair Work Commission wondering why it is bothering, and allow others to refuse to accept decisions they don’t like. And if Labor is elected and perseveres, it will also allow a less worker-friendly successor to overturn decisions it doesn’t like.

Read more: How the major parties stack up on industrial relations policy

Authors: Anthony Forsyth, Professor of Workplace Law, RMIT University

Read more http://theconversation.com/labor-wants-to-restore-penalty-rates-within-100-days-but-what-about-the-independent-umpire-116154

Business News

Is Your Brand Showing Up in AI Search? Most Melbourne Brands Aren't.

The New Front Door Nobody Told You About Something changed. Quietly. Without a press release. The way buyers find businesses in Australia has been rewired. Not replaced, rewired. Google isn't dead...

Daily Bulletin - avatar Daily Bulletin

How Australian Businesses Can Measure SEO ROI

SEO can feel vague when you are staring at a dashboard full of numbers that do not clearly connect to revenue. The key is to measure the right signals in the right order, then tie them back to outcome...

Daily Bulletin - avatar Daily Bulletin

How Commercial Roller Shutters Improve Site Security Without Slowing Operations

Security upgrades can be frustrating when they make everyday work harder. A door that takes too long to open, creates bottlenecks at shift change, or fails at the worst time can turn “better protectio...

Daily Bulletin - avatar Daily Bulletin

Why a Document Destruction Service Still Matters for Modern Businesses

Businesses generate large volumes of information every day, from staff records and contracts to invoices, reports and customer files. While attention often focuses on how documents are stored, the way...

Daily Bulletin - avatar Daily Bulletin

Bicycle Rack Safety and Space-Smart Storage

Bike storage problems usually show up as small annoyances first: tangled handlebars, scratched frames, and bikes that topple when you pull one out. Over time, those issues become safety risks, especia...

Daily Bulletin - avatar Daily Bulletin

How to Tell if a Childcare Centre Is a Good Fit for Your Child

Choosing childcare can feel like you’re making a huge decision with limited information. Tours are short, centres are often on their best behaviour, and your child might act differently in a new space...

Daily Bulletin - avatar Daily Bulletin

Car Import Timeline: What Usually Happens at Each Stage

Importing a car into Australia can feel confusing because multiple agencies and checkpoints are involved, and the timeline is shaped as much by paperwork quality as it is by shipping speed. The most u...

Daily Bulletin - avatar Daily Bulletin

Portable Toilet Hygiene Standards Explained: Clean vs Sanitised vs Disinfected

In portable toilet servicing, the words clean, sanitised, and disinfected often get used as if they mean the same thing. They don’t. And that difference matters because a unit can look tidy and still ...

Daily Bulletin - avatar Daily Bulletin

Options Available When a Company Faces Financial Distress

Financial distress can develop gradually or arrive suddenly, and when it does, the decisions made in the early stages often determine what options remain available later. Directors who act promptly ...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

What Actually Makes a Good Criminal Lawyer in Melbourne

Most people only think about this question once. That is usually too late. Most people charged wi...

Why Working With A Chatswood Tutor Can Improve Academic Performance

Academic expectations continue increasing for students across primary school, high school, and senio...

Is It Worth Getting Solar Panels in Melbourne?

The real question is not whether solar works in Melbourne. It works. The question is what it is co...

How A Diploma Of Project Management Builds Practical Skills For Modern Work Environments

Developing the ability to plan, execute, and deliver outcomes efficiently is a key requirement in to...

How to Choose the Right Football for Every Level

Choosing a football may seem straightforward, but the right option depends on who will be using it a...

What to Ask a Wedding Photographer Before You Book

Booking a wedding photographer can feel deceptively simple: you like the photos, you like the vibe...

Why Stress Relief For Dogs Is Essential For Emotional Balance And Long-Term Wellbeing

Managing emotional health is just as important as physical care when it comes to pets, which is why ...

Australia’s Best Walking Trails and the Shoes You Need to Tackle Them

Australia is not short on spectacular walks. You can follow ocean cliffs in Victoria, cross ancien...

Why Pre-Purchase Building Inspections Are Essential Before Buying a Home in Australia

source Have you ever walked through an open home and started picturing your furniture, family d...