Service standards ‘sliding as penalty rates bite’
Hospitality employers say they are skimping on service for customers as they struggle to meet demand for extended trading and pay penalty rates to staff.
In its submission to the Fair Work Australia four-yearly review of modern awards, the Chamber of Commerce and Industry Queensland calls for a “significant rethink” of penalty rates. It says there is a correlation between youth unemployment and a tougher penalty rates system. The current system also failed to recognise the global competition faced by Australian businesses which were now competing with rivals online.
“Since the introduction of the Fair Work Act, the rate of inactive young people in the labour market has reached historical highs,” the submission says.
“Workplace reforms such as increased minimum work engagement periods and ongoing increases in junior rates of pay act as examples of award rate disincentives (that are) discouraging businesses from taking on young workers.”
The release of the submission came as Fair Work Ombudsman Natalie James issued a reminder to employers that the minimum wage was increasing from tomorrow. After July 1, the new national minimum wage for a full-time adult will be $17.29 an hour, or $656.90 a week.
Ms James said failure to pass on annual pay increases was a common cause of employee underpayment and businesses needed to be sure of their responsibilities. CCIQ director of advocacy and workplace relations Nick Behrens said penalty rates were identified by hospitality businesses as their major industrial relations issue.
He said a survey of 1000 Queensland businesses by CCIQ in partnership with Clubs Queensland, the Franchise Council of Australia, Queensland Hotels Association, Queensland Tourism Industry Council and the Motor Trades Association found 81 per cent regarded penalty rates as a “major to critical cause for concern”.
“Interestingly, only 5 per cent of businesses in the hospitality sector chose to reduce operating hours in response to penalty rates,” Mr Behrens said.
“Instead …. as a consequence of the rigidities in the penalty rates regime, businesses are forced into situations to reduce employment hours, impacting on customer service standards and/or scale to cover fixed operating expenses.”
Mr Behrens said most businesses supported the continued regulation of penalty rates but were seeking reduced loadings and the ability for greater negotiation on rates.
The CCIQ submission says the notion that penalty rates are to compensate for “unsocial” work hours fails to recognise that many people make lifestyle choices to work at night and weekends.
“The current regime is also impacting on some businesses’ ability to trade profitably at times when consumers now prefer to shop, for example, later in the evenings or on Sundays,” it says.
Source: The Australian - 30th June 2015
