Productivity Commission: weekend penalty rates blocking reform

Weekend penalty rates have ­become “fallen logs blocking the reform pathway”, the Productivity Commission says.

Perth bar worker Mitch Gurrin relies on weekend penalties to supplement his income. Picture: Colin Murty

Weekend penalty rates have ­become “fallen logs blocking the reform pathway”, the Productivity Commission’s chairman Peter Harris declared yesterday as he unveiled proposals to government that would split the award safety net into a two-tier system favouring “essential” workers.

As foreshadowed in The Australian, the commission’s draft ­report on workplace relations proposes changes that would safeguard penalties for health and emergency services, among other industries, but carves out retailing, hospitality, entertainment, ­restau­rant and cafe staff where, ­Mr ­Harris said, there was “intense ­debate about penalty rates”.

Workplace Relations Framework

Key recommendations

Business groups welcomed the recommendations, which align Saturday and Sunday weekend rates for workers not protected from the changes. However unions, which had warned they would fight any threat to penalty rates, accused Tony Abbott of using the commission to win backing for policy changes.

The commission also recommended public-holiday loadings be scrapped for any new holidays gazetted by governments, and for bosses and employees to be free to agree to “swap” public holidays to other work days to a time staffing and workload dictated.

Restaurant & Catering Australia, which estimates adjustments to the penalties system would create 40,000 hospitality jobs, said the changes would “significantly boost hospitality employment and make businesses more sustainable”.

“The cafe and restaurant industry is hamstrung by the current ­regime that sees businesses operating at a loss on some days, particularly public holidays,” said association chief executive John Hart. “The proposal of two new public holidays in Victoria is a perfect example: the gazettal of Easter Sunday and grand final eve is likely to cost the state economy $900 million.”

Hospitality workers union United Voice branded the proposal “economic apartheid”, and said those who stood to lose their penalties for working Sundays were “second-class citizens”, a view echoed by the Shop, Distributive and Allied Employees union.

But Mr Harris said Saturday and Sunday were now treated as the same by retailers: “Awards are already on a ­reform pathway in Australia. They are becoming less of an ­impediment. But there are fallen logs blocking the reform pathway; the most prominent of these is penalty rates for weekend work.”

The report mentions agriculture, transport, utilities, “those parts of manufacturing requiring continuous production” and health and emergency services as fields where the “community, ­employers and customers have long accepted weekend work and associated high penalty rates”.

Although apparently quarantined from any changes, nurses have vowed to fight cuts to penalty rates for any “sidelined” workers.

Australian Nursing and Midwifery Federation assistant federal secretary Annie ­Butler said she viewed cuts to penalties for retail, hospitality and other staff as “the thin edge of the wedge”.

Bar worker Mitch Gurrin, 26, said Sunday penalty rates helped support him through his film­making degree at Perth’s Edith Cowan University.

“As a student you knew you only had limited time to work so you would target those weekend shifts,” he said. “If I had to take time off work for exams I knew I could make it up with some weekend work.”

Mr Gurrin still relies on two jobs working 30 hours a week in small bars. The going rate for a cocktail-maker is about $25 an hour during the week, with penalty rates for Sunday shifts boosting his weekly pay packet.