Naritas Finance

..



.

Business News

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

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[1], here[2] and here[3].

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[4] 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[5]

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[6]” 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[7].

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[8].

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[9].

The Council of Small Business Organisations conceded two weeks ago that the cuts failed to create one new job[10]. 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[11] 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[12]

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[13]

References

  1. ^ here (theconversation.com)
  2. ^ here (theconversation.com)
  3. ^ here (theconversation.com)
  4. ^ WorkChoices (en.wikipedia.org)
  5. ^ Myths about penalty rates and those who rely on them (theconversation.com)
  6. ^ voting eight times (www.penaltyratesrecord.com)
  7. ^ $218 for a fast food worker and $369 for a pharmacy employee (www.billshorten.com.au)
  8. ^ if the Coalition is re-elected (mckellinstitute.org.au)
  9. ^ the lowest industries for job growth in the year after rates were cut (www.tai.org.au)
  10. ^ failed to create one new job (www.theaustralian.com.au)
  11. ^ New Daily (thenewdaily.com.au)
  12. ^ Bill Shorten's promise of a living wage is both realistic and necessary. But it's not enough (theconversation.com)
  13. ^ How the major parties stack up on industrial relations policy (theconversation.com)

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 Daily Media Business Development

Bahrain Property Show 2018: How does it reflect the real estate market development in Bahrain

It is no secret that the Arabian Peninsula and the Gulf Cooperation Council (GCC) countries are currently going through a lot of pivotal changes. Such changes do not include economic or po...

News Company - avatar News Company

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The black-tie Gala Dinner s...

Helen Hull - avatar Helen Hull

Five Reasons Melbourne Rules

If you are traveling in Australia and have left Melbourne off your destination list, then you are going to want to reconsider. Many people consider Melbourne to the best city in the world...

News Feature Team - avatar News Feature Team

Making Friends During Your Campsite Stay

Part of the excitement of vacation is meeting people who you would never otherwise encounter. Staying at a campsite isn’t just about taking in nature. It’s also about sharing the beauty of n...

News Feature Team - avatar News Feature Team

Have More Fun On Your Business Trips

Whether you are a traveling salesman or someone who finds themselves on the road more than in their office you probably are grateful for any tips you can get especially if they involve havin...

News Feature Team - avatar News Feature Team

Traditions of Rural Bali at Villa Sabana

A Privileged Insight into the Traditions of Rural Bali at Villa Sabana  Situated in the traditional village of Pererenan near Canggu, Villa Sabana is peacefully secluded in a semi-rural...

Linda Lim - avatar Linda Lim

Business Daily Media Business Reports

Di Jones real estate recognises high achievers

Di Jones celebrated its outstanding performers on Saturday (24 February 2018) evening at the Di Jones Real Estate Annual Awards.                               The bla...

Helen Hull - avatar Helen Hull

Eclipse Travel Expands Operations to New Zealand

Eclipse Travel, specialists in key adventure destinations such as Antarctica, the Arctic, Africa and Latin America, have announced today their expansion of operations to ...

Yvonne Kong - avatar Yvonne Kong

How medical professionals can benefit from an overall wealth management solution

As a health care professional, you have made it your life's work to focus on the care and health of the general public. While this kind of work can be extremely rewarding...

News Feature Team - avatar News Feature Team

Why Pinterest Should Be Part of Your Marketing Strategy

Pinterest is a growing social media platform that can deliver significant traffic to your website and new followers to your brand. With it’s steady growth and outrageous ...

Greg Nunan - avatar Greg Nunan

The top reasons why gyms fail

Steve Grant is a Business Coach and Founder of GymHub.com.au   Every month thousands of new trainers walk out of their 6-month course with the qualifications needed ...

Steve Grant - avatar Steve Grant

WHITE LABEL NOBA’s Winter 2016 season: Earth + Country

Taking cues from the warm winter colours of tobacco and caramel, and combining them with the strength of navy and the embracing lightness of whites and creams; and then...

Kath Rose - avatar Kath Rose

Former Etihad boss brings substantial event insight to PMY Group Board

Paul Sergeant PMY Group, the architects of the digital insurgency occurring at major venues across Australia and New Zealand, are delighted to welcome 35 year even...

Annie Konieczny - avatar Annie Konieczny

More training for coffee making than property sales: REINSW

Sydney 9 May 2016. An overhaul of education and training standards for the real estate profession must take place to help prevent illegal activities, according to the Rea...

Helen Hull - avatar Helen Hull