When Kate Carnell became CEO of the Australian Chamber of Commerce and Industry in March 2014 vowing to take a hard line against weekend penalty rates, she would not for a moment have envisaged quick success, or indeed union support, in her endeavour. Penalty rates have been a fixture of the industrial relations landscape for generations, and zealously protected by the union movement. Imagine her surprise then at the agreement reached between the Shop, Distributive and Allied Employees Association and Business South Australia to end Saturday and evening penalty rates in the state, halve those paid on Sundays, and reduce them on public holidays from 150 per cent to 100 per cent. That the deal appears to have been initiated by the "Shoppies" would have been doubly satisfying for Ms Carnell.
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In exchange for the ratcheting back of loadings, the deal will see retail workers receive a higher base wage, a guaranteed annual pay rise of 3 per cent, and the right to refuse to work on Sundays and public holidays. Permanent staff will also be given the right to every second weekend off. Only if it is agreed to by employees will the "template agreement" be adopted by small businesses. However, the expectation is that it may eventually extend to about two-thirds of the states 60,000 retail workers in small and medium-sized businesses.
Characterising the deal as exemplifying how industrial relations should work – with unions negotiating with business to deliver outcomes that suited both employees and employers – SDA secretary Peter Malinauskas sounded like a man well pleased with his handiwork. "We understand how important it is to strengthen our economy and create local jobs in SA, but we should never do that at the expense of the wage and conditions of working people". Ms Carnell, meanwhile, said she hoped the agreement would be the beginning of revisions to penalty rates in the retail and other sectors around the country, a view echoed elsewhere.
When the Sabbath was more rigorously observed in Australia, shops ceased trading at 12.30pm on Saturdays only to open again on the following Monday, and finding a restaurant or café open on a Sunday or public holiday was a novelty, penalties rates were largely a non-issue. That era vanished long ago, however, and as Australia has progressively come to resemble a 24/7 service economy, so employers have become more disenchanted with what they see as a relic of a bygone era in workplace relations.
They argue that loadings are a disincentive for anyone who wishes to profit from liberalised trading hours. Retailers competing with internet traders go further, claiming they threaten their profitability and long-term survival. Moreover, as Ms Carnell has noted, the expectation that people working a standard five-day week should get paid more for a Sunday hour rather than a Friday hour seems illogical.
At first blush, the trade-offs for forfeiting the right to penalties appears attractive and it would not surprise if employees in small to medium retail enterprises jump at the opportunity, with the outright encouragement of their bosses. To characterise this development as a win-win for all concerned may be precipitate, however. Those workers in retail (and hospitality for that matter) for whom penalties matter more than most – casuals and other non-permanent staff – will be the losers from the South Australian initiative. Penalty rates, arguably, help compensate casuals for the frequently irregular nature of their employment and because they otherwise receive no holiday pay or sickness benefits. And, though it is sentiment heard less often nowadays, there is still a belief that weekend shift workers who forgo the chance to socialise or spend time with family and friends should be compensated for that lost opportunity.
If the deal engineered by Mr Malinauskas and and Business SA disadvantages casuals – and they are a growing sector of Australia's workforce it must be pointed out – it ticks all of the boxes for permanent retail workers and their employers. The ACTU is expected to continue to make the case for penalty rates to stay in place. However, the template agreement overseen by the Shoppies has set a precedent that will be increasingly difficult to counter.
