Retail penalty rates debate nears conclusion

The final week of hearings in the Fair Work Commission (FWC) has kicked off today with the Australian Retailers Association (ARA) confident the evidence it has put forward in the case demonstrates that current Sunday penalty rates under the General Retail Industry Award 2010 (GRIA) are costing jobs and impeding growth in the retail sector.

The ARA and the retail industry has been engaged in a review of GRIA for the past 18 months, with the view to reducing the costs for retailers who trade on Sundays, proposing a reduction in Sunday penalties from the current double time (100 per cent) to time and half (50 per cent).

Russell Zimmerman, executive director of the ARA, said a reduction in Sunday penalty rates will have a number of benefits for the community and economy, in addition to cost reductions for retail businesses.

“Should Sunday penalties be cut, retailers will be able to afford to employ more staff for more hours. With youth unemployment rates at an all time high, and retail being one of Australia’s largest private employers, this change will enable businesses to employ more staff, helping to reduce unemployment levels, particularly in the sector of under 25s,” said Mr Zimmerman.

“Retail employees cite shortage of staff as one of the most significant negative aspects of Sunday work – a direct consequence of the high penalty rates in place under the current GRIA. A reduction in Sunday penalty rates will allow retail employers to be able to provide more labour hours to retail employees who would like to work on Sundays.

“More staff employed for further hours will lead to more money in the pockets of these workers, increasing their spending power and fostering a stronger economy overall.”

Independent research commissioned by the retail industry demonstrates retail employees are prepared to work on Sundays for a lower penalty rate, with most retail workers indicating that their willingness to work on Sundays changes very little whether they are paid at double time or time and a half.

In December, the Productivity Commission’s (PC) final report on Workplace Relations Framework recommended that given changes to Australian lifestyles, Sunday rates should be brought into line with those of Saturday penalty rates – 25 per cent, or time and a quarter.

“It is important to note that the ARA does not advocate for the removal of penalty rates, simply a reduction of the current Sunday penalty rate of double time and a half.

“The ARA and our legal teams believe the FWC is in the best position to make a decision on this important issue for the retail industry, and we are hopeful for a successful outcome,” said Mr Zimmerman.

Penalty rate changes needed: AACS

Over the Easter long weekend last month retailers were forced to bear the brunt of much higher costs, with penalty rates applicable for up to four days in some states and as high as double time and a half.

Jeff Rogut, CEO of the Australasian Association of Convenience Stores (AACS), told C&I Week at the time: “Penalty rates affect the franchisees and the owners, and when times are tough it means they are reducing their profitability. In many cases franchisees and owners are putting in a lot more hours themselves if they having difficulty in paying the additional costs.”

“Our members don’t close [during Easter] because it’s a very important time of year, after all we are in the business of convenience. We do recognise that there should be some additional benefits for employees working additional holidays and weekend but not to the extent that it is at the moment because it is excessive in some cases,” Mr Rogut said.

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