Retail penalty rate cut would create 40,000 jobs: submission

Young workers are less likely to feel Sunday work impacts on their time with family and friends Source: istock

Nearly 40,000 extra Sunday and public holiday jobs would be created if penalty rates in the restaurant industry were reduced on those days, new research suggests.

In its submission to the Fair Work Commission review of modern awards, Restaurant and Catering Australia argues that the original reasons for higher penalty rates on Sundays and public holidays were becoming less relevant.

The current requirements were undermining the ability to open businesses to meet consumer needs, reducing shifts and hours and making it difficult for businesses to make profits.

The ACTU has long argued against reducing penalty rates in retail and hospitality, saying that would hurt already low-paid staff without creating extra jobs.

The RCA submission cites ­research by Jetty Research, based on responses from 1000 business owners and managers across Australia. Extrapolation of the findings found that 39,800 extra staff would be employed nationally on Sundays and public holidays with reduced penalty rates and 60,000 hours of extra employment would be created.

The submission asks that full-time and part-time penalty rates for Sundays in the Restaurant Indust­ry Award be reduced from 150 per cent to 125 per cent, to align it with Saturday rates, and that public holiday penalties be cut from 250 per cent to 150 per cent for permanent and casual staff.

“As the Australian services indus­try continues to move toward­s ­a 24-7 trading environment, it is consumers that demand restaurants and cafes are trading hours that meet the modern society­,” the submission says.

“Businesses that are restricted in trading hours by outdated industrial awards or restrictive legislative regimes by federal, state and local governments will naturally fail to realise their full potential.”

Nearly half of new businesses that had entered the industry in recent years had since closed and high labour costs had been linked to this. The level of labour-intensity combined with the high prop­ortion of hours in which penalties were paid meant current profit margins were “unsustainable”.

Restaurant businesses averaged profit margins of just 3.6 per cent, compared with 10.8 per cent across all businesses.

The submission said the award was not helping low-paid workers because they were getting fewer opportunities in the restaurant indus­try and fewer hours.

“Many of the owners and operators of restaurants fall into the category of ‘low-paid’ and in many cases businesses are operating at a commercial loss on Sundays and public holidays or are choosing not to operate at all on Sundays and public holidays,” it said.

Another submission lodged on behalf of the Australian Retailers Association, the National Retail Association, the Australian Nation­al Retailers Association and the Master Grocers Associa­tion uses Monash Business School research to highlight the impact of weekend penalty rates on retail.

The research found most weekend shopfloor employees were aged 24 and younger and did not consider that working Sundays had an adverse health impact. Younger employees were much less likely than older workers to believe Sunday work impacted on their time with family and friends.

“Many retailers feel forced to remain open on Sundays either due to leasing arrangements or to remain competitive,” the research found.

“As a result, most retailers are investigating means to reduce labour­ costs on Sundays.”

Source:  The Australian - 13th July 2015