Murray Watt set to block retailers’ trade-off on penalty rates

Murray Watt will dramatically intervene to oppose the push by major retailers to allow penalty rates to be traded off.

Workplace Relations Minister Murray Watt will intervene against retail employers n the Fair Work Commission. Picture: Steve Pohlner

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Workplace Relations Minister Murray Watt will dramatically intervene in the Fair Work Commission to oppose the push by major retailers to allow penalty rates to be traded off, as Labor seeks to make industrial relations a key battleground during the looming federal election campaign.

Ramping up claims that workers’ entitlements would be under threat if the Coalition were elected, Senator Watt portrayed his intervention as Labor stepping in to “save penalty rates” in contrast to big business and Peter Dutton being in “lock-step” when it came to cutting wages and conditions.

In a submission to be filed on Friday, Senator Watt will urge the commission to reject an application from the Australian Retailers Association, the peak body for large retailers, including Woolworths and Coles, to cut penalty rates and other entitlements in the award covering retail employees.

Senator Watt said granting the application would allow penalty rates, rostering, breaks, minimum rates, allowances and overtime to be “traded off” for workers paid between $53,680 and $61,958 per year.

“This could mean thousands of Australians would no longer be protected by these important award conditions, even though they would still earn significantly less than the average weekly wage.” he said.

The ARA proposal covers permanent workers earning above $53,670 on the retail award and would allow employers to buy out penalty rates, overtime and leave loadings in exchange for a 25 per cent pay rise.

The ACTU, which is strongly opposed to the claim, says the $53,670 pay threshold is only $6000 more than the annual minimum wage of a full-time worker and well below the “low-paid” threshold the FWC considers when updating award wages.

Unions said if the application succeeds, cuts to penalty rates could spread to workers in other award-reliant industries, including hospitality, healthcare, fast food and administration.

Senator Watt said retail workers giving up their nights and weekends to keep Australians fed and clothed deserved penalty rates. “We’re focused on helping Australians earn more, while the big supermarkets and retailers are trying to cut their penalty rates,” he said.

“If employers want to agree with workers to trade off award entitlements, then they can do this through enterprise bargaining, not through variations to awards.

“Awards are supposed to be a safety net to protect all workers. They should not be varied to remove crucial entitlements like penalty rates for low-paid workers. Big business and Peter Dutton are in lock-step when it comes to cutting wages and conditions. They’ve done it before, and they’ve promised to do it again.”

ARA chief industry affairs officer Fleur Brown on Thursday accused unions of running a misinformation campaign.

Ms Brown said the proposal, if granted, would allow retail managers to be able to choose an annual salary at a higher fixed rate over variable, hourly penalty rates.

“There is no proposal to remove penalty rates, overtime or paid breaks from the award. What the ARA has proposed is that managers can opt into a pay increase if they select the voluntary salary absorption option,” she said. “This will only apply to employees that agree to it.

 “Similarly, our proposal has never suggested removing breaks from the award. We are simply proposing that any employees who prefer to take an early mark can opt into that.”

Ms Brown said employee access to a consistent higher fixed salary would allow them to better plan their finances and obtain loans. “The Fair Work Commission has already endorsed the alternative framework in comparable awards. Such arrangements operate successfully and fairly across the economy. It is unfair that retail employees are denied similar opportunities.”