Court rules in favour of penalty rates

by Chloe Taylor24 Sep 2015
Hundreds of workers will begin to receive weekend and late-night penalty rates after winning a case against employer Pancake Parlour.

According to media reports, the chain had its WorkChoices-era wage deal terminated last week in favour of the restaurant industry award. This will consequentially raise the pay of up to 750 employees around the country.

The majority of employees who were covered by the old system were being paid a flat rate of between $13 and $23 an hour, missing out on penalty rates for nights and weekends.

An analysis of the employees’ pay showed that some workers could have been up to $2,500 better off a year under the award.

The case comes amid debate around the subject, as the Productivity Commission investigates whether penalty rates should be dropped.

Last month, the Productivity Commission wrote in a draft report:
“Sunday penalty rates that are not part of overtime or shift work should be set at Saturday rates for the hospitality, entertainment, retail, restaurants and cafe industries.

“They predict these changes will increase business opening hours and provide better job opportunities in these sectors.”
 On casual workers, the commission stated that “weekend penalty rates for casuals in these industries should be set so that they provide neutral incentives to employ casuals over permanent employees”.

In light of the Productivity Commission’s recommendations, the Business Council of Australia (BCA) warned that it would not accept the review of workplace relations reform without question.

The BCA argued that Australia needs a sweeping overhaul of its awards system and enterprise bargaining processes.
Jennifer Westacott, the BCA’s chief executive, said the country’s biggest businesses would push for a range of changes to the national system of awards, arguing that they “should be stripped back to their core purpose”.

She added that this is something the Productivity Commission “seems to have put into the too-hard basket”.

New Prime Minister Malcolm Turnbull has also previously weighed in on the impact of imposing penalty rates.

“You see businesses, particularly hospitality businesses like cafes and restaurants and so forth, closed on weekends … because the penalty rates are so high,” he said last year. “Now that’s nuts.”

The case against Pancake Parlour was launched by an employee seeking to replace the company deal with full award entitlements.

The company did not oppose the application, Fairfax Media reported.
The company told the tribunal that by scrapping the agreement it would be forced to review the trading hours of its 24-hour and late-night outlets.

Management would also have to consider revoking free staff meals, and supervisors would potentially be laid off in favour of more casual employees.

Mandy David, Pancake Parlour’s managing director, said the company’s biggest challenge would be finding a way to offer staff the same level of flexibility after the change.

She told Fairfax that as the company transitioned into the new agreement, management was consulting employees on an individual basis.

“Paying our staff properly is a priority,” she said.

“If our wage costs go up, they go up. We are proud of our strong relationship with our team.”

Fair Work Commissioner Julius Roe said that the company’s workforce would now be entitled to a range of benefits that they were previously not receiving. These included penalty rates, greater certainty of working hours, minimum breaks between shifts and laundry costs.

Employer group Restaurant and Catering Australia echoed BCA’s concern, claiming that the existing penalty rates regime was leading to business closures and restricting productivity.
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