The federal Labor government has pledged to legislate award penalty rates if reelected, a move that has prompted strong criticism from business groups.
Employment and Workplace Relations Minister Murray Watt said the proposal responds to industry lobbying efforts. It comes as the Fair Work Commission reviews a push to allow retail managers to opt for higher fixed annual salaries instead of variable penalty rates.
Watt expressed alarm over the proposed changes. “If successful, these applications by employer groups would reduce the overall income of workers by thousands of dollars each year,” he said.
But business groups have backed the application, which was submitted by the Australian Retailers’ Association (ARA).
“It sounds pretty reasonable to us, from a business point of view,” said Australian Chamber of Commerce and Industry CEO Andrew McKellar on Sky News in February. “In a lot of cases, these awards really aren’t modern, but here’s a chance to introduce some flexibility.”
Another part of the ARA’s proposal is a new “simplified” general retail industry award, which Chief Industry Affairs Officer Fleur Brown says will remove some of the “enormous burden on small to medium businesses in particular” when it comes to keeping track of different retail pay rates.
How could these potential changes impact small-business employers?
Some business groups are worried that legislating award rates could cause additional monetary difficulties for small businesses.
“If wage increases aren’t linked to productivity gains, they’re inherently inflationary and that means we risk seeing living standards decline further,” said Business Council Chief Executive Bran Black.
On the other hand, if employees get the legal right to choose between annual salary and variable hourly penalty rates, this could also introduce more complexity for small-business employers.
“This is something they would have to look at – whether they can accommodate that flexibility with a small workforce,” said Andrew McKellar.
Council of Small Business Organisations Australia CEO Luke Achterstraat expressed support for a simplified awards system.
“In the retail sector alone, employers must navigate 994 different pay rates across 96 pages just to ensure their employees are paid correctly,” he said.
“Red tape and complexity is undermining the viability of Australian small businesses. It’s not sustainable.”
