Fewer workers get Sunday shifts following penalty rate cut

The dramatic cut to penalty rates last year - predicted by the Fair Work Commission to boost jobs - was instead followed by a decline in Sunday shifts worked by employees in retail and hospitality.

New research from the University of Wollongong measured Sunday shifts worked before and after the penalty rate cuts in July last year; and despite a small bump in 2018, the rate has now slumped to below 2017 figures.

The Fair Work Commission's 2017 review into penalty rates said evidence supporting cuts to penalty rates would lead to increased trading hours on Sundays and public holidays; a reduction in hours worked by some owner operators; an increase in overall hours worked and in the range of services offered on Sundays and public holidays.

Thousands of workers protested cuts to penalty rates in Sydney. Photo: Jessica Hromas

Thousands of workers protested cuts to penalty rates in Sydney. Photo: Jessica Hromas

But the research, by the University of Wollongong 's associate professor of economics Martin O'Brien and Macquarie University's emeritus professor of employment relations Raymond Markey reveals not one of these outcomes has been achieved.

These results, from a survey of nearly 2000 workers and more than 200 employers, follow on from their earlier research which showed that after the 2017 cuts, some workers experienced a drop in the number of penalty-rate hours they worked in the first two months after the cuts were introduced.

"We couldn't establish any reliable statistically significant improvement to award employee or owner manager employment outcomes," said Professor O'Brien.

The biggest decrease in this survey was the percentage of retail workers working at least one public holiday, which fell from 54 per cent in 2016-2017 to 49 per cent in the 2018 financial year.

The Sunday penalty rate for permanent retail award employees was reduced from 200 to 150 per cent; and from 200 per cent to 175 per cent for casual employees.

The Australian Chamber of Commerce and Industry's CEO James Pearson said the gradual phasing in of the penalty rates meant it would take "time to see positive employment effects".

"Very small sample sizes, for example interviewing less than 250 employers nationally, make this research unreliable, and the sentiments and behaviours outlined in the report cannot be assumed to be representative of Australia as a whole," he said.

ACTU secretary Sally McManus said the new researched showed cutting penalty rates was hurting workers and small businesses.

"This new research shows what we have been saying all along was correct: Cutting penalty rates hurts working people and hurts small business by reducing the money people have to spend," she said.

Mr Morrison and the business lobby promised more jobs and more shifts but what this research shows is that was lie. Working people have less money and less secure work. Mr Morrison needs to match the Labor commit of reversing cuts to penalty rates."

The Centre for Future Work on Wednesday released a report which estimated that employees whose penalty rates had been cut would miss out on $80 million over the Easter break.

  • Jenna Price is an academic at the University of Technology Sydney.