Industry call for penalty rate reform, as youth unemployment spikes

Calls for reforms to penalty rates were made over the last week by key industry groups the Australian Retailers Association and the Australian Chamber of Commerce & Industry (ACCI) as Australia’s youth unemployment rate reaches a 12-year high.

Peak retail industry body the ARA said reducing penalty rates is a crucial step in creating higher levels of employment for Australians.

ARA executive director Russell Zimmerman said that the ACCI’s recent comments regarding the detrimental effects of penalty rates on both employers and employees were 100 percent warranted, despite union criticism.

“It’s all over the news at the moment – Australia’s unemployment rate has soared to its highest level in 12 years.

There’s no denying the fact that retailers would employ more staff if they did not have to pay penalty rates. SME retailers in regional areas in particular, who do not currently open on Sundays, would definitely consider their options if penalties were reduced.

“A number of larger retail members have advised the ARA that whenever their stores are not ‘forced’ to open under their lease requirement, they close the store completely due to severe double-time penalty rates.

“If these stores could afford to be open, they would in turn employ a number of staff on a Sunday and this would not only improve business in country and regional stores but increase employees discretionary spending.”

While not calling for penalty rates to be abolished, the ARA said there is a strong need to get the balance right so that retailers can operate competitively on weekends and offer increased employment opportunities.

Coca-Cola wage freeze

As part of a national strategy to lower wages, Coca-Cola Amatil has this week sealed a new pay deal with its Victorian warehouse workers. Under the deal workers at Coca-Cola Amatil’s warehouses around the country will have their wages frozen until 2015 and new employees will receive 38 per cent less pay to do the same job. The pay freeze will be followed by a pay increase of about $30 in 2016.

The AFR reports that a CCA spokesman said “the deal brought wages closer to market rates”.

Stephen Smith, national workplace relations director at the Australian Industry group, told the AFR that this type of deal is being seen across Australia. “We are seeing very modest wage outcomes across most sectors at present, given the economic circumstances, and wage freezes are certainly not uncommon.”

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