Matters of Interest

Sunday Penalty Rates

The Hon. T.T. NGO (15:26): In December 2014 the then Abbott government requested that the Productivity Commission (the commission) examine Australia's workplace relations system. The commission's task was to assess the performance of the workplace relations framework, focusing on key social and economic indicators important to the wellbeing, productivity and competitiveness of Australia and its people. A draft report released by the commission on 4 August 2015 found:

Australia's workplace relations system is not dysfunctional—it needs repair not replacement. Contrary to perceptions, Australia's labour market performance and flexibility is relatively good by global standards, and many of the concerns that pervaded historical arrangements have now abated. Strike activity is low, wages are responsive to economic downturns and there are multiple forms of employment arrangements that offer employees and employers flexible options for working.

After that finding the commission then recommended cutting the wages of Australia's lowest paid workers by slashing their Sunday penalty rates. It said:

Penalty rates have a legitimate role in compensating employees for working long hours or at unsocial times. They should be maintained. However, Sunday penalty rates for cafes, hospitality, entertainment, restaurants and retailing should be aligned with Saturday rates.

It is interesting that the report only recommends cuts for hospitality and retail staff. It does not recommend cuts to Sunday penalty rates in other industries such as manufacturing, doctors, nurses, police, etc., even those whose base pay rates are a lot higher. The commission implies that there is more intense community debate about penalty rates in hospitality and retail than other parts of the workforce such as manufacturing and health and emergency services, and that therefore their penalty rates should be cut.

That is the problem with this report. Just because an issue is being debated in public does not mean that it is a problem or that there are no problems elsewhere. Workers in retail and hospitality are mostly young, women and migrants and their employment is casual. They are definitely low income. These workers are very vulnerable to victimisation, and because of that their employers are in a position of power to constantly campaign to reduce their working conditions. It is as simple as that.

I am really disappointed with the commission which, I believe, is made up of intelligent people, but they do not seem to understand that. The commission's recommendations sees these workers as easy targets and therefore it is going to single them out. Why does the commission cite the case of New Zealand, where regulated weekend penalty rates no longer apply across all industries, yet the commission thinks it makes sense in Australia to target only the lowly paid by recommending cuts to retail hospitality workers?

Workers in hospitality and retail are people working in a bar after hours, people serving your food while you enjoy a football game, or people who serve you at the supermarket checkout on the weekend. The little extra that is earnt on a Sunday by these workers does not go towards an extravagant lifestyle: it often goes to ensuring that the bills are paid and food is put on the table.

There is no evidence or economic analysis that a reduction in penalty rates would increase employment and business turnover. The Fair Work Commission, in rejecting an application to reduce penalty rates in 2013, said:

there is no reliable evidence regarding the impact of the differing Sunday (or other) penalties when applied upon actual employer behaviour and practice…There is also no reliable evidence about the impact of the existing differential Saturday or Saturday penalties upon employment patterns, operational decisions and business performance.

My questions to the commission are: why does it value the time workers from other sectors spend with their families on Sunday more than that of workers in hospitality and retail? Why does it think one group of workers missing out on taking their children and family on a picnic or to the playground is worth compensating for than some others? Does the commission think that one group of children is worth less than others because their parents are on struggle street?