Economy

Employers say Fair Work Australia’s penalty rate review is “too little too late”

Cara Waters /

Employers have raised concerns about Fair Work Australia’s test case on penalty rates set to commence next week.

FWA president, Iain Ross, will lead the review.

However, the retail industry is concerned it may not get a fair hearing as it tries to halve penalty rates, while the hospitality industry says changes should have been made two years ago.

FWA is reviewing all modern awards with any common issues to be dealt with by a full bench and other issues to be dealt with by single members.

The review has received 282 applications and will commence with a directions hearing on May 9.

John Hart, chief executive of Restaurant & Catering Australia told SmartCompany the directions hearing was likely to be uneventful, as it will just set out a program for how FWA would deal with the case.

“As we know, FWA deals with things very slowly so I would not expect too much,” says Hart.

Restaurant and Catering’s submissions to the FWA have called for the days on which penalty rates are paid to be moved from Saturday and Sunday to days six and seven of work.

“For those working Monday to Friday from nine to five there will be no change to the rates they are paid, but Saturday and Sunday should not be sacrosanct,” says Hart.

Hart says Restaurant & Catering is satisfied with the structure of the FWA test case and the case is urgently required.

“I think the fact the issue is being dealt with by a full bench allows us to adequately present our recommendations … the issue with penalty rates particularly has not really been considered as part of any of the award processes to date, so it is a timely hearing.

“Some of these issues have had a very marked impact on business and the reason we see a large increase in business- related bankruptcy is these have been allowed to go for two years.

“We were raising some of these issues when our modern award was established two years ago.

“The process up front could have been more wide reaching in its approach, we could have considered this two years ago.

“Business related bankruptcies are at an all-time high, so for every one of those businesses it is two years too late.”

 Gary Black, executive director of the National Retail Association, told SmartCompany the association has made submissions calling for a reduction in the Sunday penalty from 100% to 50%, a reduction in casual loading and more flexible part-time conditions.

Black says the association is “optimistic” about the hearing, as it believes there are a number of arguments that support it submission.

However, Black has voiced concerns that the retail industry may not get a fair hearing if FWA considers each application provision by provision instead of each award in turn.

“There has been some clarification around that matter so I understand there will be scope for industry specific review, which is very important for retail,” says Black.

“If there is not an industry specific review that translates into a more global review which makes it harder for the characteristics of each particular industry to be understood, it would make it harder to get resolutions.”

“If retail is lumped in with the banking sector and other unrelated sectors then the risk is that the very specific industry considerations with which we are concerned may not attract the sort of weight they would if they were considered in an industry specific setting.”

Fair Work Australia declined to comment.

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Cara Waters

Cara Waters is the former editor of SmartCompany. Previously, Cara was a senior reporter at the Financial Times website FT Adviser in London and she also worked for The Sunday Times in London.

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