Federal election 2016: penalty rates a poll bombshell

The industrial umpire is expected to rule by July on employer demands to slash Sunday penalty rates.

Former ACTU chief and ex-Labor minister Martin Ferguson has accused unions of ‘using workers as political pawns’ over the penalty rate debate. Picture: Andrew Taylor

Malcolm Turnbull will be forced to confront one of the Coalition’s most politically sensitive issues during the election campaign, as the industrial umpire is expected to rule by July on employer demands to slash Sunday penalty rates.

As Labor’s industrial wing gears up to resurrect an anti-Work Choices-style campaign against the Coalition, former ACTU chief and ex-Labor minister Martin Ferguson has accused unions of “using workers as political pawns” over the penalty rate debate.

The independent Fair Work Commission is reviewing penalty rates in seven awards in the hospitality and retail sectors as part of the four-yearly review of modern awards under the Fair Work Act introduced by Labor in 2009.

Mr Ferguson writes in The Australian today that unions “need to accept that work conditions and attitudes have changed since the 1950s’’.

“We support workers being remunerated extra for working on weekends and public holidays, but the compensation needs to be sensible, otherwise businesses just close or reduce hours.

“The unions need to explain how a worker not earning anything is better off than a worker earning a reasonable wage with a realistic loading?’’

Employers want Sunday penalty rates to be cut from 200 per cent to 150 per cent and public- holiday penalties from 250 per cent to 200 per cent. Under the FWC’s own benchmarks, a decision is expected to be made during the campaign or shortly after the poll. This will ensure the Prime Minister is unable to sidestep the vexed issue during the campaign.

The Australian understands some members of the government are hoping the FWC will defer its verdict until after the election, fearing a decision during the poll will be as damaging as the Reserve Bank’s decision to raise interest rates during the 2007 election, which contributed to the defeat of the Howard government.

Australian Industry Group chief executive Innes Willox said if a decision on penalty rates was delivered during the campaign, “the government needs to be bold and argue for and embrace the change”.

“It is going to be the front and centre IR issue, it’s going to be the industrial relations issue that captures people’s attention ... there will be the mother of all union scaremongering campaigns to try and stop this (but) there are major consequences for our economy if the decision goes in the union favour,’’ he said.

“Businesses are screaming about this. It is impacting hugely and manifestly on their ability to compete and employ and to train.”

Mr Howard’s overreach on industrial relations in 2007 with Work Choices was exploited by the unions to turf him out of office. Since then the Coalition has been highly sensitive about workplace reform.

The Coalition has repeatedly said any decision on penalty rates would be left to the FWC.

Mr Turnbull wants to fight the double-dissolution election on the Coalition push to stamp out union lawlessness on construction sites by reinstating the Australian Building and Construction Commission; Labor and the unions will mount a fight over penalty rates.

Gerard Dwyer, national secretary of the Shop Distributive and Allied Employees Association that represents retail, fast-food and warehouse workers, said “a cut to penalty rates would be disastrous for many Australian families, particularly those in lower-paid hospitality and retail jobs’’.

“If the federal government won’t publicly back workers, workers will be left with no choice but to ramp up our campaign in the lead-up to the federal election,” Mr Dwyer said.

United Voice assistant national secretary David McElrea said during the election campaign, “working Australians will be out on doorsteps, in shopping centres and on street corners reminding ­people in those electorates that Malcolm Turnbull and his government have refused to support penalty rates’’.

Writing in The Australian, Mr Ferguson, who has fallen out with the Labor movement over his support to modernise the workplace, calls for the labour movement to “let the Fair Work Commission make their judgments on the reform process without threats of retaliation if the decisions don’t go their way”.

The former union heavyweight is chairman of Tourism Accommodation Australia, a division of the Australian Hospitality Association pushing to overhaul Sunday rates.

After two years of hearings, the FWC’s decision-making panel rose on April 14. A verdict is expected within eight to 12 weeks, according to the tribunal’s “benchmark”. A 12-week process would mean a decision on July 7, whereas an eight-week process would see a decision on June 9.