Australia reacts to controversial penalty rate changes

The FWC’s controversial changes to penalty rates has provoked a mixed response from politicians, businesses and unions

Australia reacts to controversial penalty rate changes
Yesterday the Fair Work Commission announced reductions in Sunday and public holiday penalty rates in the retail, fast food and hospitality industries.

The changes are due to come into effect on July 1, 2017. However, Labor and the Greens have vowed to fight the decision with the latter promising to
introduce legislation in parliament to protect penalty rates for retail, fast food, hospitality and pharmacy workers. - See more at:
introduce legislation in parliament to protect penalty rates for retail, fast food, hospitality and pharmacy workers. - See more at:
introduce legislation in parliament to protect penalty rates for retail, fast food, hospitality and pharmacy workers.

Among the changes were that hospitality workers on an award will have their Sunday penalty rate cut from 175% to 150%, retail workers’ rates will get cut from 200% to 150% and fast food workers will have their rate cut from 150% to 125%.

Opposition leader Bill Shorten said workers had been "kicked in the guts" and that Labor is going to do their best to convince the FWC not to implement this decision.

"If we are unsuccessful, we will also be changing the law in Parliament to change the rules that the Fair Work Commission operate under,” he said.

"I have never seen an argument which would justify wholesale pay cuts for the lowest paid workers in Australia."

However, Employment Minister Michaelia Cash said the decision is a direct result of the review process put in place by Shorten.

“Any suggestion by Bill Shorten and the Labor Party that they do not accept this decision is highly hypocritical. Bill Shorten needs to explain why he instigated a wide-ranging review of penalty rates if does not support a change in penalty rates,” she said.

“Bill Shorten is responsible for establishing the framework that has led to today’s decision. He cannot now escape responsibility for the outcome of this process.

“The Turnbull Government’s position has been consistent and clear – the setting of penalty rates are a matter for the independent Fair Work Commission to determine, not Government. The Government has no plans to change the way penalty rates are set.”

Meanwhile, the Australian Hotels Association said the FWC’s decision to reform Sunday and Public holiday penalty rates is a first step towards a modern hospitality industry.
AHA and Tourism Accommodation Australia (TAA) led the submissions to the FWC on behalf of the hotel sector.

TAA is chaired by the Hon Martin Ferguson AM, a former ACTU President and Federal Tourism Minister, who said the FWC decision should be respected.

“From the industry point of view we haven’t got everything we want. That is the nature of the Fair Work Commission,” he said.

“We respect their decision and we will try and make it work.

“For us the objective was to modernise the award, not to abolish penalty rates, but to make it relevant to the 21st century as a means of employing more Australians.

“We are currently experiencing the largest-ever expansion of accommodation hotels across the country, so it is imperative that workplace reforms support this growth phase.”

Further, Steve Knott, CEO of the resource industry employer group AMMA, said their organisation welcomes the decision to reduce Sunday Penalty Rates from double-time (200%) to time-and-a-half (150%) for most industries.
“While weekend penalty rates are not a big issue for resource employers, whose employees are typically on annualised salaries and are among the best remunerated in the country, we support any decision which moves our workplace relations system in a more competitive direction and provides employers with savings to invest into employing more staff,” he said.

However, ACTU President Ged Kearney said the FWC’s decision to radically cut Sunday and public holiday pay will give almost one million Australian workers a huge pay cut.

“The Australian Council of Trade Unions (ACTU) calls on the Turnbull Government and all political parties to immediately act to protect working people from any cuts to their take home pay, as the cuts are due to come into effect on 1 July, 2017,” she said.

“This is a cut Australian workers cannot afford and do not deserve. The decision also comes a day after record low wage growth was reported for the second consecutive quarter. Australians deserve a pay rise, not a pay cut.”

Moreover, acting General Secretary of the NSWNMA, Judith Kiejda, said the decision to modify penalty rates in the hospitality, fast food, retail and pharmacy sectors would impact the health sector.

“There’s a real prospect that changes in one industry will have a ripple effect into others, this is a genuine threat to our nurses and midwives, and aged care workers who rely on penalty rates for 20 per cent of their income,” Kiejda said.

Kiejda added that the decision had wound back decades of progression in workers’ rights and threatened the livelihoods of those who need it most.

Will the penalty rate changes come into effect on July 1, 2017? Keep reading HC to find out.

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