Bill Shorten’s vow to change law to protect pay is a vote of no confidence in the Fair Work Commission, council’s chief says

This article is more than 3 years old

This article is more than 3 years old

The Council of Small Business of Australia has reacted furiously to Labor’s promise to reverse looming cuts to Sunday penalty rates, saying it is a “disgraceful” pledge that will set a dangerous precedent.

The Labor leader, Bill Shorten, in a closed-to-media speech at the Australian Council of Trade Union’s 90th anniversary dinner on Tuesday night, promised a future Labor government would legislate to change the cuts that are coming into effect on 1 July.

Bill Shorten pledges to restore cuts to Sunday penalty rates Read more

“I promise you this: a new Labor government will restore the Sunday penalty rates of every single worker affected by this cut,” Shorten told the audience. “And we will change the law to protect the take-home pay of working Australians into the future.”

But Peter Strong, the chief executive of the Council of Small Business of Australia, has attacked Shorten’s promise, saying it is a misguided policy that will create more volatility. He said the Fair Work Commission, which made the decision to cut penalty rates, was an independent body that should be free from political interference.

“That’s a vote of no confidence in the Fair Work Commission, that’s all it is,” Strong told ABC radio on Wednesday. “The Fair Work Commission’s made one decision [Labor] don’t like and they’re going to undo it.

“Does that mean if the Liberal party doesn’t like a pay rise [decision by the commission] can it then pass something through parliament saying, ‘No, we’ll undo this pay rise’? Is that the same? I think this is disgraceful.

“There’s the uncertainty that’s been created now. If the Fair Work Commission makes a decision that the government or an opposition don’t like, well they can just wait until they’re in government and undo it. So why bother with decision making?”



The Fair Work Commission decided in February to cut some Sunday and public holiday penalty rates by up to 50 percentage points in the retail, pharmacy, hospitality and fast food industries, arguing they no longer provided a “fair and relevant” minimum safety net.

This month the commission announced how those cuts would be phased in over three to four years.

It prompted Russell Zimmerman, the executive director of the Australian Retailers Association, to criticise the long phase-in time, saying retailers wanted a quick transition to “more sustainable penalty rates”.

But two major Australian chemist chains have already said they won’t be cutting their Sunday penalty rates because they value their staff.

Labor has opposed the penalty rates decision since it was made in February, even though it had championed the independent tribunal.

Two pharmacy chains announce they will not pass on penalty rate cuts Read more

The shadow employment minister, Brendan O’Connor, told the ABC’s Fran Kelly on Wednesday that if a future Labor government could reverse the looming penalty rate cuts it would not try to secure backpay for any workers.

“It would be too disruptive to think that we could expect businesses to sort out all of the payments they made based on the laws as they stood,” he said.

He also said Labor would ensure that future wage reviews by the Fair Work Commission would not lead to similar cuts in penalty rates.

“We would make sure that through this process you can’t have take-home pay reduced because that, in our view, was not the purpose of an examination of the awards,” he said.

“The idea that you’d have a net cut without compensation, which is exactly what happened in relation to this decision, is unpalatable, unfair and unacceptable to Labor.”

O’Connor said Labor would change the Fair Work Act to ensure workers won’t see their pay reduced under future wage reviews.