Retailers to push for IR reform as Productivity Commission report says industry must respond to 24/7 online retail competition

The retail industry wants the Government to reform how employees are paid in the retail sector, saying drastic changes are needed if the industry adopts customer calls for seven day trading and more flexible hours.

The calls come alongside recommendations contained in last week’s report from the Productivity Commission for the Government to review flexibility in the retail workplace and how it can be improved.

Australian Retailers Association executive director Russel Zimmerman says the industry wants far more flexibility in how employees are paid – specifically for workers who aren’t operating within a traditional working week.

“Currently, under the award, if you’re working on Wednesday through Sunday, you get weekend penalty rates for the last two days on the weekend,” he told SmartCompany this morning.

“We feel that we don’t necessarily need to pay penalty rates unless it’s overtime or if an employee works beyond the five days contained in their work week.”

The report certainly recommends the Government look at how current workplace relations policy could be holding the industry back.

“The industry remains relatively award reliant and many employers and their employees appear not to have adequately taken advantage of opportunities to examine how workplace practices might be improved,” the report stated.

“It is critical that employers, employees and unions work constructively to implement productivity enhancing workplace arrangements, including those focused on operational and trading house flexibility and improved customer service.”

The report also noted that employers are quite concerned about penalty rates, given wages are “growing at a faster rate than the prices of goods they sell”.

There are several problems with flexibility, the report argues, with many employers just passing on high labour costs to consumers, resulting in a higher shift to online sales. This is a key issue considering the industry is “high labour intensive”, with 70% of value added by workers.

The Commission has recommended the Government review all this next year. Zimmerman says such a review is necessary given customers are demanding more flexibility.

“They want retail open seven days a week, and there is a major call in some of the states to extend trading hours. But when we have a problem with that is when we work someone on a weekend, and they’ve already done 20 hours as part of their week.”

“We think there just needs to be a sensible debate from both sides – both employers and the unions.”

Another key issue, Zimmerman says, is that many businesses are confused over some aspects of pay.

“Under Fair Work there have been cases where you need to pay overtime for casuals working over 38 hours. However, there has been another ruling where that wasn’t the case. We’d just like some clarity.”

“Other issues we’d like to see fixed are the one and a half hour minimum shift for schoolkids. That’s in the basket waiting to be fixed up.”

The report says the Government should look at the context of the current system and should consider any options to allow the efficient negotiation of enterprise-based arrangements that can improve productivity.

“The first review of modern awards by Fair Work Australia, scheduled for 2012, is a further opportunity to address concerns that relate specifically to the operation of relevant retail awards.”

Zimmerman says the industry just wants the ability to compete.

“We’d like more clarity, and we’d like to see a lot more flexibility to give plenty of opportunity.”

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