industrial relations

As politicians fight it out on penalty rates, cosmetics retailer Lush attracts new shoppers by taking a stand

Emma Koehn /

As a fiery debate over penalty rates continues to consumer the federal Parliament, one Australian business appears to have gained new customers by deciding to maintain Sunday payment rates at current levels.

Cosmetics retailer Lush took to Facebook last Friday to assure its customers it would not be applying the Fair Work Commission’s decision to allow businesses to lower Sunday loading rates for workers covered by the retail, hospitality, pharmacy and fast food awards.

“The happiest and most productive employees are those who feel safe, valued and listened to by their employers,” the business said.

Director of Lush Australiasia Peta Granger tells SmartCompany the decision was made because the company appreciates the challenges faced by its staff members.

“Lush decided not to cut penalty rates because we believe that the concept of fair trade is now not just needed for growers and small scale farmers, but also for employees of businesses as life choices become harder for those in lower pay sectors,” Granger says.

Since the company announced its position, Granger says there has been a visible result when it comes to customers engaging with the brand and visiting stores.

“This announcement received an extremely positive reaction from the public, reaching millions through shares, likes and comments. Many commented that they planned to visit a store to show their support, and our sales and footfall have increased since,” Granger says.

The company has made its position clear, Granger says, that treating staff fairly can flow on to business success.

“More than anything we hope this highlights to businesses and politicians that in Australia treating staff fairly and ethically is rewarded with both engaged staff and customers,” she says.

Lush’s announcement, which generated hundreds of comments and saw more that 11,000 shoppers engage with the company’s Facebook post, has prompted several individuals to contact to the brand to say they are motivated them to shop with them for the first time.

“Hearing about your decision to continue paying penalty rates made me go into your store for the first time today, and truly I am in love!” one shopper said.

Minister says penalty rates cuts will help mum and dads “working for free”

While businesses like Lush are showing their hands early in terms of their response to the ruling, debate over the suitability of the Fair Work Commission’s decision continues to rage in Parliament.

Opposition leader Bill Shorten has vowed to fight the proposed cuts with legislation, while Prime Minister Malcolm Turnbull insists Shorten was responsible for the situation in the first place, given he referred the issue to the Fair Work Commission when he was previously workplace relations minister.

This morning employment minister Michaelia Cash teed off against Shorten in an interview on Radio National’s breakfast program.

The minister called out what she said is the opposition leader’s “consistent hypocrisy”, and said while bigger businesses have been able to negotiate with employees through enterprise bargaining agreements, small businesses have never had that luxury.

When asked whether the decision should involve trading off the hourly rate against other conditions for workers, Cash said many small business owners that she speaks to, particularly in regional areas, currently don’t on Sundays in the first place.

“The majority of small businesses I talk to, in particular in rural or regional Australia either don’t open on a Sunday…or they’re a mum and dad who do open their business on a Sunday…but they’re actually working for free,” she said.

Business groups have been insistent this week that the numbers stack up and that a decrease in Sunday penalties will equal more hours for workers in small businesses.

“This presents new opportunities, particularly for young people who often get their first job in retail and hospitality,” Victorian Chamber of Commerce and Industry chief executive Mark Stone said in a statement this morning.

Others have observed current payment rates are not fair to business owners.

“I will just make this point…the head of the Fair Work Commission said that fairness cuts both ways and that the penalty rate situation was neither fair nor relative to employers in the current economy,” Australian Industry Group chief executive Innex Willox told RN Breakfast on Tuesday.

However, some shoppers on social media say companies that maintain current wages are taking a stand on the issue, and this will prompt more spending.

“Plenty of people like me will buy your products and support your shops because you have taken this principled stand,” one customer told Lush this week.

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Emma Koehn

Emma Koehn is SmartCompany's senior journalist.

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  • Kevin Gleeson

    If the Gov is blaming Labor for the FWC. decision for the loss of penalty rates for workers then you could blame Howards Gov For the loss of lives in the Iraqi War ..same proposition