New deal could change the way 40,000 Aussie workers are paid

by Chloe Taylor26 Mar 2015
A new deal which would reduce or abolish penalty rates could mutually benefit employers and the workforce, its pioneers have claimed.

The South Australian branch of the Chamber of Commerce and Industry has made a deal with a union that could lead to the state’s retail workers volunteering to accept lower penalty rates on Sundays and public holidays in exchange for increased base pay.

Up to 40,000 workers at smaller retailers could be covered by the deal – which would also eliminate Saturday and weekday evening penalty rates. In return, employees would be guaranteed annual pay rises and benefits including the right to refuse weekend work.

The Shop, Distributive & Allied Employees' Association (SDA) claimed that the proposed agreement it has negotiated with Business SA has the potential to work nationwide, and could reduce employer groups’ issues with pay rates.

“Business SA has actively engaged with the union, rather than just trying to rip workers' entitlements away in the Fair Work Commission”, SDA official Peter Malinauskas told Australian Associated Press. “This deal shows that the legitimate path is to negotiate with workers and unions rather that constantly arguing for cuts to workers’ wages”.

Malinauskas argued against claims made by Australian Chamber of Commerce and Industry (ACCI) and Business SA that the union was accepting that penalty rates posed problems.

The agreement’s architects are hoping that the South Australian model will expand across Australia, easing a major cost burden for retailers who are struggling to compete with online shopping.

“I applaud both parties for recognising that penalty rates are an impediment to retailers opening at certain hours and therefore inhibiting growth in jobs and work hours,” said Kate Carnell, ACCI’s chief executive.

Russell Zimmerman, executive director of the Australian Retailers Association (ARA), said that he is hoping the deal will strengthen the ARA’s Fair Work Commission case for reduced Sunday penalty rates across Australia.

“We're seeing that unions really do now understand that Sunday penalty rates at 100% are unsustainable and it's a decision that will help the industry,” he said. “It's a good start, in the right direction.”

However, the Business Council of Australia has expressed scepticism over the deal.

“It looks like a commonsense deal.” BCA chief executive Jennifer Westacott told ABC Radio. “But ... we can't have the economy held hostage to ad hoc deals. We need a lot more predictability, a lot more simplification and this can't be solved on a deal by deal basis.”

The ACTU is expected to continue campaigning for penalty rates to remain in place, arguing that workers’ end of the deal rewards them with “a big fat nothing”.

Victorian Premier Daniel Andrews said that he will not support any deal that cuts the wages and benefits of workers.


  • by Paul 26/03/2015 11:57:48 AM

    "The agreement’s architects are hoping that the South Australian model will expand across Australia, easing a major cost burden for retailers who are struggling to compete with online shopping."

    If a cost burden is being eased this implies the increase to base rate will be minimum compared to the current penalty rates on offer therefore employees will be worse off. Also what are employers going to do when non of their employees want to work Sundays.

    Like always CCI never assess all variables and just take a narrow, one sided and head in the sand stance a say employers shouldn’t pay penalty rates. If they win the battle they just advertise the fact and who gets a little greedier - the landlords. If penalties stop the landlords will get wind that the retailers have made a saving and rents will just go up. So all that is going to happen is the money moves from the pockets of the dedicated employees prepared to work Sundays and who deserve it - into the hand of the greedy landlords who can never get enough.

    Who do you think is paying for Westfield’s CEO Frank Lowry $15,964,902 annual remuneration?


    Not Likely.

  • by Sarah 26/03/2015 3:51:00 PM

    And when the eradication of penalty rates moves even more people to online shopping who will they blame?

    People shop online because it is cheaper, but the reason for that is not price alone. I am happy to pay a small premium to purchase from retail store when I receive service at the same time. Reducing penalty rates will make it harder for stores to attract staff that care and are knowledgeable and so more customers will turn to the internet for information, and hey while they are there purchase the product.

    Stores that provide genuine service are still doing well - stores that have terrible service, like Myer for example, will continue to loose revenue to the online alternatives.

    Retail wages are already low, are we happy to be heading for a situation, as exists in places like America, where the people that work in the stores are unable to purchase from the same stores. Are we happy to move toward a society of working poor, people who have to work two or three jobs just to feed their families???

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