Written on the 25 March 2015


THE landmark deal in South Australia to slash weekend penalty rates for retail workers has business owners in sister states asking why it is not occurring in their area.

Employment law expert Brett Wilson says it is inevitable that business and unions throughout Australia will closely examine the SA deal and there will be pressure to implement it in other states.

Wilson, of employment law firm Adams Wilson Lawyers, says while the SA agreement between the shop assistants' union and Business SA is being hailed as a breakthrough in the penalty rates war, the deal does not automatically mean changes in Queensland.

Wilson says if businesses and unions start an intense penalty rates war in Queensland, it may rebound on both of them, and hurt the local economy.

He says a push by Queensland's major business bodies for a revamp of industrial laws including more flexible penalty rates and minimum wage hikes linked to productivity could have a negative impact on some industries.

"If you cut weekend and public holiday penalty rates, you take the motivation to work from many in the restaurant trade, and any pay cuts will inevitably see a rise in staff throwing a sickie at the weekend, adding pressure to colleagues and employers alike," he says.

The South Australia deal will see the end of Saturday penalties and the halving of those paid on Sundays, while retail workers will be offered higher base rates of pay and improved conditions. These include the right to refuse weekend work on Sundays and public holidays.

The South Australian deal reduces retail employee penalty rates for Sundays from a 100 per cent loading to 50 per cent, cuts public holiday rates from 150 per cent to 100 cent, and abolishes penalty rates on Saturdays and weekday evenings.

In return, workers will receive a higher base wage, a guaranteed annual pay rise of 3 per cent, and the right to refuse to work on Sundays and public holidays. It also gives permanent workers the right to every second weekend off.

Wilson says he understands that businesses want changes to minimum wage increases to ensure they reflect economic conditions and productivity, but penalty rates had been a fact of business life for decades and businesses should know how to structure themselves around the cost overheads.

"Restaurants and cafes do their biggest business at weekends and holidays. If you cut penalty rates you potentially cut the motivation for staff to come to work on those crucial days. You can expect lots of weekend and holiday sickies," says Wilson.

"Some of those working in hospitality, especially as casuals, might find it easier to just go on the dole if their pay is cut so there's an impact on the economy. I can see the arguments from both employers and workers and there's no simple solution."

Wilson adds that the issue would inevitably be fought on a national political stage at next year's federal elections.

"I expect business lobby groups across the country will be lobbying hard to drive down penalty rates, especially in the wake of the South Australia deal for retail sector workers," says Wilson.

"But unions here will be going to the barricades to fight against changes. Both parties need to consider all the possible impacts, but I fear it's going to end in tears for some parties."






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