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Landmark deal to cut penalty rates

(Transcript from World News Radio)


A landmark deal to slash penalty rates in exchange for higher wages has been struck in South Australia’s retail sector.



As Karen Ashford reports, it sets a national precedent that could transform Australia’s workplace relations.


(Click on audio tab to listen to this item)


It’s heralded as a win-win that cuts business costs without harming workers’ wages.


Unions and the business lobby in South Australia have agreed to reduce penalty rates, but boost wage levels, in what could set a national precedent.


Rhett Biglands is a former footballer who runs sportswear stores in Adelaide.


He says the deal struck between the Shop Workers Union and peak employer body Business SA is welcome news.


“It just results in flexibility with more opening hours, more hours for staff and the consumer in the end get to shop more often and have more flexibility with their social life. So I think the main one it will help is uni students as well. Some of our uni students just work flat out and have no social life because they have to work on Sundays – they’ll now be able to time manage and work better throughout Monday to Fridays and get some social life back.”


One of Mr Bigland’s workers is Phil Spagnuolo.


As a student who struggles to find a work-life balance, he thinks the deal will deliver real benefits.


“Just with the flexibility – Instead of having to, you know, always have my weekends booked out for working, because I know I’m going to have that higher in my rate, I’m going to have that across the board so I’m going to be more flexible during the week and it’s going to allow me to free up my weekends and vice a versa, as I need.”


The deal helps business by abolishing Saturday and evening penalty rates, halving the current penalty rates for Sunday, and reducing public holiday penalties from double-time-and-a-half, back to double time.


In return workers will receive higher-than-award wages, giving them an extra $60 a week, an annual 3 per cent pay rise, the right to refuse Sunday and public holiday work, and every second weekend off.


Peter Malinauskas is the secretary of the so-called shoppies union.


“It demonstrates that the existing fair work act allows employers to negotiate with unions and employees to deliver outcomes that are potentially beneficial for both the employer and employees. We think that is a real step forward in the right direction on behalf of the business community, which otherwise up until this point have simply been advocating that penalty rates should be slashed or abolished without giving anything to employees in return.”


The deal affects about two-thirds of South Australia’s small and medium retail traders, and some 40,000 workers.


The Chief Executive of the Australian Chamber of Commerce and Industry, Kate Carnell, says the deal could be a boost for the struggling retail sector.


“It doesn’t get rid of penalty rates. They’re still there. But it significantly reduces and helps those small businesses open the hours that their customers want them there. For small businesses to be able to compete they need to be open. To be open they need to be able to afford staff. And that’s what this is about.”


The federal government has asked the Productivity Commission to examine the workplace relations framework, including penalty rates – but Peter Malinauskas says that’s unnecessary.


“This agreement demonstrates that the approach that the Abbott government have been supporting of trying to cut workers’ entitlements, cut workers’ penalty rates without giving them anything in return is wrong. This demonstrates that the Abbott government should stop its aggressive IR agenda and instead allow the current system to work.”


South Australian Labor frontbencher Mark Butler wholeheartedly agrees.


“This is what we envisaged when Paul Keating’s government put together the enterprise bargaining model more than 20 years ago -this is exactly the model that we envisaged and it’s in stark contrast to the idea that you could go up to the industrial commission and try unilaterally to change penalty rates across the country.”


There’s been a mixed response from federal MPs – some , like crossbencher Ricky Muir are concerned about any cuts to penalty rates …


“I’m a supporter of penalty rates, I’ve been a beneficiary of penalty rates. And I certainly didn’t work into weekends or afternoon shifts, where I didn’t get to spend time with my family and children, for the love of the job. I did it to actually try to get ahead in life.”


…but others like Liberal Democrat Senator David Leyonhjelm back the bold new approach.


“Cutting the weekend penalty rates in SA is great news, fantastic news. Bob Day (SA family first Senator) and I have been banging on (talking) about this for months. It is just ridiculous that people who want to work on weekends are priced out of the market by silly rules. It is great news.”


Independent South Australian Senator Nick Xenophon says the deal recognises a social reality.


“It’s always been my position that there needs to be greater flexibility for small employers, that in hospitality and retail Saturdays and Sundays are pretty much ordinary trading days.”


Federal Industry Minister Ian Macfarlane says the deal is a step forward.


The new system will be voluntary for workers and employers.




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