Penalty rates could soon be a thing of the past with South Australia cutting weekend rates for a higher base salary.

WEEKEND penalty rates are set to be slashed in South Australia’s retail sector after a landmark agreement between the shop assistants’ union and Business SA.

In the first agreement of its kind, the deal will see the end of Saturday penalties and the halving of those paid on Sundays, 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 move has been applauded by the Australian Chamber of Commerce and Industry, which says it could jump start the struggling retail sector and stimulate jobs growth. The ACCI hopes the decision will be replicated across the country.

“This template approach gives these smaller retailers a real ­opportunity to compete better with larger retailers, and also look at how they can grow their business and employ more people, particularly the significant number of youth that are unemployed,” the ACCI’s chief executive Kate Carnell told The Australian.

“We are hopeful that this would flow across Australia.”

Sources have confirmed the breakthrough to The Advertiser and it understood it came about after the Shop Distributive and Allied Employees’ Association approached Business SA, which represents the retail industry as well as other small business in South Australia.

The expense of weekend penalty rates has long been seen as a disincentive to small retailers opening longer or staying open on weekends and it is hoped the deal will stimulate the struggling retail sector, while also generating more economic activity and potentially creating more retail jobs.

According to the report in The Australian, the template agreement signed between the union and Business SA can be adopted by small businesses if agreed to by employees, and would apply to about two-thirds of the state’s 60,000 retail workers in small and medium-sized businesses.

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

For a full-time shop assistant, the base rate of pay would jump by 8 per cent from $703.90 a week to $760 a week.

At workplace level, the deal would still require signed agreements to ratified by the Fair Work Commission.

Retailer and former AFL footballer Rhett Biglands, who owns Nike Rundle Mall in Adelaide, said having to pay staff public holiday penalty rates previously made it uneconomic for him to open.

“Anything that would help me open on those public holidays and Sundays would help me out and help my customers out, and would provide more employment for young people,” he said.