Penalty rates setback for cafes, restaurants

The Fair Work Commission has rejected a push by the nation's restaurants and cafe owners to radically cut penalty rates paid to employees for working weekends, leading employers to urge the Abbott government to take a more aggressive approach to workplace relations.

In a decision hailed by unions, the commission found granting the employer bid only to pay penalties to those working six or seven consecutive days would have had a significant impact on the take-home pay of low-paid workers.

Employers slammed the "ridiculous" commission decision, warning that thousands of businesses would be forced to close on Sundays, unable to afford to open their doors because of rising labour costs. They called for the Coalition, which has pledged to leave the setting of penalty rates to the FWC, to take a more interventionist approach when the issue was again examined by the tribunal in hearings next year. Employment Minister Eric Abetz said yesterday the commission was an independent tribunal and he respected its role in setting the terms of modern awards.

He pointed out that yesterday's decision had been made in the context of the commission's two-year transitional review of modern awards, a process he described as "narrowly cast".

"The minister understands that some parties may be frustrated that the commission has not made more significant amendments to modern awards through this process," a spokesman said.

"There will be a broad review of modern awards in 2014 where parties will have an opportunity to raise any outstanding concerns with modern awards."

Restaurant and Catering Australia chief executive John Hart said Senator Abetz should make a submission on behalf of the government to next year's review, setting out the impact on employers and employees of the costs associated with the modern award.

"The thought that this is a win for workers is just crazy stuff," Mr Hart said.

"It means more restaurants will close on Sunday, more workers won't have work, and there will be less places for people to eat out."

He said while his organisation would participate in next year's review, he was concerned at how long it had taken the commission to hand down yesterday's decision, given it was part of a 2012 review.

"It has taken two years to get a decision," he said. "My concern is 2014 is three months away. In another two years, there will be 6000-odd businesses going to the wall and it will be at the point of no one opening up on Sunday."

The RCA had proposed no penalties be paid for work on Saturday or Sunday, or for working between 10pm and 7am from Monday to Friday. Instead, it proposed penalties apply only where an employees worked six or seven consecutive days.

In her decision, deputy president Anne Gooley said while she accepted the employer application would reduce employment costs and the regulatory burden on businesses, "this does not necessarily lead to an improvement in productivity".

She did not accept the submission there were no longer any "disabilities" associated with working unsociable hours.

She said restaurant and catering workers were low paid and disproportionately dependent on the minimum rates of pay in the industry award.

"If penalty rates were only payable on the sixth and seventh day, this would have a significant impact on the take-home pay of the employees in the industry," she said.

The commission found the application "in effect" sought to eliminate penalties for the vast majority of employees because it would not be unreasonable to assume that very few worked a sixth or seventh day.

She said evidence produced by operators was limited in scope, disproportionately from Queensland, and did not generally contain financial data to back up their conclusions.

ACTU president Ged Kearney said the union movement remained concerned that business would redouble its efforts to reduce penalty rates, "with the Abbott government unwilling to defend them".

"There is still no long-term certainty that workers will keep their penalty rates," Ms Kearney said.

"The Coalition has refused to guarantee penalty rates in law, which means employer groups will continue to try to use Fair Work to cut wages."

Source: The Australian, 11 October 2013