Calls for parliamentary inquiry into penalty rates to soothe “loss of faith” in workplace relations system

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Small business ombudsman Kate Carnell. Source: Supplied.

Key members of the small business community are calling for a Senate inquiry into penalty rates and how employee unions negotiate enterprise bargaining agreements, as confusion over the Fair Work Commission’s decision to lower some Sunday penalty rates continues to cause tensions in the community.

On Wednesday, Small Business and Family Enterprise Ombudsman Kate Carnell told The Australian a Senate inquiry would be a “smart way to go”, as it would mean Fair Work Commission President Iain Ross could appear and discuss why the Commission made the decision that it did.

This suggestion has been backed by Peter Strong, chief executive of the Council of Small Business of Australia (COSBOA), who tells SmartCompany misinformation continues to dominate the penalty rates debate. Strong believes the community has “lost faith” in the system and the way wages are negotiated.

“There’s total confusion — the myth is that we want to completely get rid of penalty rates,” Strong says.

“It ignores the fact that many [workers] are already on the lower rates [through enterprise bargaining agreements]. A Senate inquiry would say, ‘let’s get around all the misinformation and the wrong information’ — let’s get it out there.”

Over the past week public debate over the Fair Work Commission’s decision has continued to rage, with workers and unions mounting social media campaigns against the changes.

On Wednesday, a series of tweets from the Australian Chamber of Commerce and Industry that said the Fair Work Commission’s decision is a win for women garnered a significant volume of objections from workers and women’s groups on social media.

Hundreds of comments objected to the point of view on Facebook and Twitter, with many questioning whether the cuts would improve availability of employment in the long run.

“This is sickening,” one comment writer said on Facebook.

“I’m interested by this claim that reducing penalty rated [sic] will result in businesses hiring more employees with the money they save. I mean it sounds like it might be plausible, but I’m yet to see anyone produce hard data to show that’s been the *actual* effect when this has been done elsewhere,” said another worker.

This community scepticism was also indicated in a recent Essential Poll on the penalty rates issue, which found 56% of Australians surveyed did not agree with the Fair Work Commission’s decision to cut rates.

When it comes to claims of increased job numbers, 24% of those surveyed said they thought the changes would result in more people being employed, while 57% said they believe the decision would lead to bigger profits for business.

A pause could be a good thing

Strong believes that if a parliamentary inquiry was to put a pause on the rollout of the Fair Work Commission’s decision to lower rates, slowing things down could restore the community’s confidence in the decision making process.

“Not many people are aware of the facts anymore,” he says.

“I think a lot of people are against the decision because they’ve been told it’s the removal of penalty rates.”

Strong says the “better off overall” test used in many enterprise bargaining agreements for big businesses is not properly applied, and has meant many workers in the retail and hospitality sectors already get a lower weekend payment rate.

“The people that have benefited form this have been very large businesses,” he says.

Kate Carnell told SmartCompany the tone of the debate is concerning because it has led to many small businesses being reluctant to voice their support for the changes, given potential backlash against them from those that oppose the changes.

“Small businesses are just too scared given what’s happened in the past when unions used social media to attack them, to force a boycott of their businesses, and to ultimately undermine their livelihood,” Carnell says.

Carnell says the Fair Work Commission’s decision was the product of hundreds of submissions and months of consideration and this also needs to be highlighted.

“Almost 6000 submissions were examined over a period of almost two years before this independent and considered Fair Work Commission ruling was made,” she says.

SmartCompany contacted the Australian Chamber for comment, but did not receive a response before publication.

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