PENALTY RATES SQUEEZING INDUSTRIES
Written on the 16 April 2014 by Laura Daquino
APRIL’S public holidays have brought the penalty rates debate to the frontline, with a Brisbane employment lawyer hearing more complaints of the rates squeezing dry small to medium sized businesses (SMEs).
Ian Heathwood of McKays Solicitors (pictured) says SMEs in competitive industries such as hospitality face the dilemma of trading unprofitably or closing up shop during the labour-expensive Easter and Anzac Day holidays.
This is in line with a submission from the Labor Party and unions to the Federal Government Fair Work Commission earlier this year urging an examination of penalty rates, yet to no avail.
“We are hearing that employers in some industries are on the knife edge of survival from the rising costs of doing business,” says Heathwood.
“The combination of employee penalty rates, higher costs of electricity and other fixed costs makes it unappealing to many restaurant owners to open on statutory holidays because the staff would be earning more than the owner.”
Heathwood says SMEs are then presented with a catch-22, as the growing trend of dining out on public holidays is increasing pressure to remain open.
“More businesses are deciding to open because people have said they are content paying more on these holidays.”
However, consumer spending is lagging far behind rising business costs.
“Due to more businesses opening, trade is spreading thinner and high wages are thus becoming a bigger burden.”
While there hasn’t been industrial law reform, Heathwood advises employers and employees to check the Award rates for each industry as they vary between.