Right: Melbourne's claim to a "cafe culture" is cited by employers as a reason for the modifiying - or even elimination - of penalty rates, as cafe customers generally attend their favourite coffee places at weekends and other out-of-office-hours times.
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Arguments in favour of retaining penalty rates
1. Employees deserve compensation for working outside usual hours
It has been claimed that working outside conventional working hours disrupts the lives of employees. It is more difficult to socialise with friends and family and to pursue sports, hobbies and other interests. Groups representing employees claim that monetary compensation, in the form of penalty rates, should be paid to those who suffer this disturbance to their lives.
Ged Kearney, the president of the Australian Council of Trade Unions, has stated, 'While the rest of us wind down for the Easter break, millions of Australian workers will give up their family time and they should be compensated for that.'
According to the University of South Australia's 'Australian Work and Life Index 2014' most Australians work Monday to Friday between 8am and 6pm. The authors of the University's report claim, '[T]hose who work unsocial hours have worse work-life interference than those who do not. Working on weekends is worse for work-life interference than working weekdays. Furthermore, working on a Sunday is associated with worse work-life interference than on Saturdays or weekdays. Working nights is also associated with worse work-life interference.'
Alex White, secretary of Unions ACT, has stated, 'As a community, we still look at weekends, Sundays and public holidays like Easter as important days of rest. Church attendance may be declining, but most Australians consider Sundays and public holidays as essential to rest, relax and spend time with loved ones before the work week begins.'
Dan Woodman, a lecturer in Sociology at the University of Melbourne has stated, 'The major events in family life, such as birthday parties, and the events that people want to attend with friends, like going to the football, continue to be overwhelmingly scheduled on Friday nights or Saturday and Sunday.'
One of Woodman's interview subjects stated, 'You're working when your friends, family or partner are at home, and you can't just go away on weekends or public holidays.' Another claimed more succinctly, 'No social life, bad sleeping patterns and no friends.'
Some have suggested that the wide-spread employment of women has worsened the burden that working non-conventional hours places on families. In an opinion piece published on April 5, 2015, Peter Martin, the economics editor for The Age, stated, 'In earlier years it didn't much matter if one member of the household worked outside standard hours. There was typically only one earner in each household, almost always the man.
If that single earner was made to work at night or on weekends it wouldn't much harm his ability to get together with his wife. She would be at home whenever he was at home.
Not anymore. These days if one partner works outside standard hours and the other works within them the penalty is real.'
2. Many low-paid workers rely on penalty rates
Employees in the broader industry sector, accommodation and food services, have the lowest average weekly total cash earnings in the Australian workforce and rely heavily on penalty rates for additional income.
In a media release issued on April 2, 2015, The Australian Council of Trade Unions (ACTU) stated, 'Even if most retail and hospitality employees worked a full time week at double time for every hour worked, they would still be paid less than full time average weekly total earnings.'
The release gave the instance of a waiter working for a celebrity chef, who would see his income slashed by 30% from $41,000 down to $29,000 if penalty rates were abolished.
United Voice has given another example indicating that a full-time cleaner at a hotel working their ordinary hours from Sunday to Thursday is paid a minimum of $726.54 a week, or $37,882 a year. If his Sunday penalty rates were scrapped, his wage would be cut by $86.34 a week and his annual wage would be reduced to $33,380 before tax.
United Voice gave another of an adult waitress at a caf or restaurant who only gets paid $16.85 an hour for her work Monday to Friday, but if she works one of her ordinary shifts on a Sunday, she makes $25.28 an hour instead. This is equivalent to just $695.10 a week before tax. If her Sunday penalty rate was scrapped, her weekly wage would go down to $640.20, which is a wage cut of $54.90 a week, or $2862 a year, on an already low salary.
The April 2, 2015, ACTU media release quoted Australian Bureau of Statistic figures which show that as of November 2014 the level 4 rate of pay in the General Retail, Restaurants and Hospitality Awards is $746.20, while Full Time Adult Average Weekly Total Earnings as at 14 November were $1,539.40. These figures are intended to indicate how low the rate of pay received by workers in these industries is, and therefore, how reliant those working in these industries are on the penalty rates they receive.
Ged Kearney, the president of the ACTU, has stated, 'We know most retail and hospitality workers are paid less than Full Time Average Weekly Total Earnings and working over the Easter break allows them extra disposable income to spend in shops and cafes - the very businesses that are driving this attack.'
The ACTU release notes that even outside the hospitality industry, losing penalty rates would mean a dramatic pay cut for many workers. The release refers to the situation of a nurse in a South Australian hospital who gets 22.9% of his or her income from penalty rates. Losing them would mean an annual pay cut of $14,000 to $22,000.
3. Penalty rates do not harm industry
It has been claimed that the supposed harm done business and industry by penalty rates is an exaggeration.
In a media release issued on April 2, 2015, The Australian Council of Trade Unions (ACTU) stated, 'Australians are being subjected to a false and misleading campaign about penalty rates by employer groups in the lead up to Easter...
Despite no evidence to support their claims, employers in the growing sectors of retail and hospitality are calling for penalty rates for working over the Easter break to be cut, citing undue pressure on business.'
Supporters of penalty rates argue that wages do not constitute the severe restriction on growth that many business claim and that their significance as a percentage of total costs has declined over the last decade.
Ged Kearney, the president of the Australian Council of Trade Unions, has stated, 'The business community, backed by the Abbott Government, is using the Easter break as justification to attack penalty rates by saying it's unaffordable to hire more workers. The truth is the share of business income going to wages in retail and hospitality has fallen in recent years.'
In its April 2, 2014 media release, the ACTU noted, 'Total wages share in food and accommodation was 78 per cent in 2013-14, down from a peak of 87 per cent in 1997-98. In retail, the wages share has fallen from a peak of 79 per cent in 1997-98 to just 73 per cent in 2013-14.'
Supporters of penalty rates further claim that the increased consumption among workers who receive penalty rates benefits the Australian economy.
In the same media release issued on April 2, 2015, The Australian Council of Trade Unions (ACTU) stated, 'What employer groups omit is paying workers penalty rates for working over Easter benefits businesses long term as it will increase disposable income for some of the country's lowest paid workers which, in turn, will be spent in local businesses.'
It has also been noted that the restaurant industry, which pays significant penalty rates to its employees is growing. Over the past five years spending at restaurants and cafes has climbed at twice the rate of spending in supermarkets.
Employment in the restaurant industry climbed 9 per cent during five years in which overall employment climbed 7.5 per cent. When the Bureau of Statistics examined the accommodation and food service industry it found gross operating profits amounted to 11 per cent of total sales, almost twice that of retail industry (6 per cent) and a good deal more than the construction (8 per cent) and manufacturing (7 per cent). The industry is twice as profitable as it was 15 years ago.
4. Restaurants can charge higher prices to compensate for penalty rates
Restaurants and cafes are usually small business that are particularly affected by having to pay their staff penalty rates. They are therefore able to impose a Sunday surcharge of 10 to 20 per cent. A few years ago the Australian Competition and Consumer Commission declared the practice illegal unless the restaurants printed separate weekend menus. Last year Parliament legislated to remove the requirement, but restaurants still need to prominently display the size of the surcharge on their menus.
The manager of Sydney's Deus Caf, Greg Lo Presti, has explained that diners who expect to eat out on those days when penalty rates apply should expect to pay a premium for their meal.
Mr Lo Presti has stated, 'It's vital. We wouldn't be open without it.
We're a very labour-intensive business and we pay the penalty rates and therefore we need to charge that surcharge.'
Federal Labor MP Andrew Leigh has stated, 'Anyone with a bit of decency instinctively understands that their pleasant brunch requires the baristas and waitstaff to spend time away from family and friends. Few decent people begrudge a caf that puts a surcharge on the menu for Sundays and public holidays.'
This surcharge appears to be quite well-accepted by a majority of customers who recognise that they need to pay an additional impost to cover the cost of service outside standard hours.
In an opinion piece published in Riot Act on September 30, 2014, Alexandra Craig stated, 'I don't mind paying a surcharge...We have pretty good workplace relations laws in Australia which we should be incredibly thankful for and yes, if we work on a Sunday or a public holiday when everyone else gets the day off, we should get a little bonus for that. That seems fair enough, right? The caf owner feels the need to put a surcharge on the days when they're bound by law to pay their staff extra.'
5. Many employees are already working additional, unpaid hours
Opponents of the abolition of penalty rates argue that many Australians already work many hours for which they are not compensated.
In November 2014 the Australia Institute released the results of a survey which indicated that the average full-time worker is doing six hours of unpaid overtime each week worth an estimated $9471 a year.
The survey of close to 1000 people around the country found 46 per cent of people are expected to work additional hours and 27 per cent said their position had become insecure. Others 'volunteered' to work unpaid overtime because they felt their chances of promotion or the security of their employment would be enhanced as a result.
The director of research for the Australia Institute has claimed that there is a growing disjunction in people's work-life balance with many employees feeling coerced to work longer hours than they would willingly choose.
A lack of work-life balance is cited as a cause of ill health among employees and the conductors of this research believe it is a problem that needs to be addressed.
42 percent of those surveyed claimed that their work-life balance had grown worse over the last five years.
The executive director of the Australia Institute, Richard Denniss, has claimed that many Australians were giving their time freely to organisations that are legally obliged to pay for it.
Dr Denniss further stated, 'It's time that employers and industry groups started to talk about how they are going to tackle this problem. It's time that governments took this problem a lot more seriously.'
Opponents of the abolition of penalty rates claim it is merely a further attempt to exploit workers' insecurity about their employment in order to reduce their work conditions.
Claims that the 40 hour week and 9 to 5 employment are disappearing may have some validity; however, social scientists argue that this is not a development that most workers appear to want.