Will higher hourly wages replace penalty rates?
The small business lobby is keen on a proposal from Fair Work Commission president Iain Ross to replace penalty rates with “loaded” hourly rates negotiated between a boss and an employee.
The basic idea, flagged last week by Mr Ross at the Australian Financial Review retail summit, is to bring in a system where employees covered by an award can trade penalties and overtime for higher base wages, without the need for a new enterprise agreement.
Mr Ross told the summit that it would be particularly good for small business.
"A loaded rates schedule would allow small businesses to access additional flexibility, without the need to enter into an enterprise agreement," Mr Ross said.
The issue of penalty rates is highly contentious.
Lobby groups like the Australian Retail Association have called for a reduction in the rates which can double the payout for people working Sunday shifts.
According to Mr Ross, the 2013 review of penalty rates by the full bench of the Commission found that "loaded" penalty rates could help to reduce the complexity of the penalty rates system.
He said the Hospitality Industry Award already allowed bosses and employees to enter into alternate arrangements.
Council of Small Business chief executive Peter Strong was encouraged by Justice Ross’ observations.
He said it would make a complicated award system simpler to manage.
“A lot of what he says is common sense and he's looking for a solution and in this case, the solution to the complexity that small business has to face when dealing with award conditions," Mr Strong told the ABC.
Mr Ross passed his remarks at a time when the retail and hospitality sectors are putting pressure on the FWC to adopt the Productivity Commission's recommendation and cut Sunday penalty rates to match Saturday rates.
Needless to say, Labor and the unions are campaigning against the proposition.
by Leon Gettler, October 7th 2016
