ALP submission to Fair Work Commission review of hospitality and retail jobs calls for penalty rates to be retained

This article is more than 4 years old

This article is more than 4 years old

Penalty rates are a fundamental part of the safety net for low-paid workers and should not be scrapped, Labor argues in a submission to the Fair Work Commission.

The commission is considering penalty rates in hospitality and retail jobs as part of its four-yearly review process.

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Labor put in a submission to the review calling for penalty rates to be retained, in line with its previous comments on the matter.

“Australia’s economic outlook is uncertain, and likely to remain so in the near term,” its submission says. “The federal opposition submits that penalty rates continue to be a fundamental part of a strong safety net for Australian workers, enabling low income workers and workers in highly casualised industries to share in the nation’s economic prosperity.”

It says penalty rates are necessary for many workers to maintain their standard of living.

“Wages are also growing at their slowest rate since the 1990s, increasing by just 2.2% in 2015. The household saving ratio now stands at 7.6 – the lowest level since before the global financial crisis. It appears that Australians are feeling the impact of this slow growth and are dipping into their savings or putting less aside to cope with their increased costs of living,” the submission said.

Twice as many workers in the retail and hospitality sectors are employed on a casual basis compared with the wider Australian workforce, making the industries particularly sensitive to changes in penalty rates, Labor’s submission says.

“Hospitality workers are in the bottom 30% of Australian income earners. Along with hospitality and food services, retail has the largest proportion of low-paid workers in Australia,” the opposition leader, Bill Shorten, said. “Women make up a disproportionate share of workers in both the retail and hospitality sectors accounting for 55% of all those employed.

“[Prime minister Malcolm] Turnbull and his government have made it clear they want to scrap the weekend penalty rates thousands of workers and families rely on to make ends meet.

“Labor understands that for these workers weekend penalty rates are not a luxury, they are what pays the bills and puts food on the table.”



The Queensland Police Union of Employees is worried that changing penalty rates for one sector will lead to a flow-on impact for other workers, including emergency workers.

“Any proposal to reduce penalty rates is nothing more than an unfair and unjust money grab that will disadvantage the employees most deserving of just recompense for the impact shift work has on their health and lifestyle,” the union’s submission to the Fair Work Commission says.

The Restaurant and Catering Industry Association’s chief executive, John Hart, says penalty rates are stopping employers from hiring more workers.

“Many cafe and restaurant businesses close or scale back staffing to counter higher wage bills on Sundays,” he said. “Sunday pay rates of up to 75% extra per hour can make businesses unprofitable, with operators often unable to break-even or run at a loss.”

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His submission calls for Sunday rates to be scaled back to match Saturday rates, creating one weekend rate. The idea was supported by a Productivity Commission report into industrial relations, released in December.

The government pledged to hold consultations into the changes proposed in the productivity commission report.

At least one Liberal MP has made a submission to the Fair Work Commission calling for one single penalty rate across weekends and public holidays.

Employer groups have until 1 April to make a submission on penalty rates to the commission.