Right: opposition to cuts in Sunday penalty rates have ignited a storm, prompting even far-Left organisations like the Communist Party Of Australia to rally against the proposed new rules
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Arguments in favour of reducing Sunday penalty rates
1. A reduction in penalty rates will enable employers to put on more staff.
Supporters of a cut in penalty rates argue that reducing employers costs will enable them to open on Sundays or to put on more staff on Sundays and so to provide additional jobs.
Conservative Liberal backbencher Eric Abetz has stated, Today's decision will be of benefit to the tens of thousands of young Australians who want to work on weekends who have increasingly found that businesses haven't been able to afford opening their doors on Sundays.
Aaron Lane, a fellow at the Institute of Public Affairs, has similarly argued that reducing Sunday penalty rates will increase Sunday work and make existing jobs more secure. Lane has stated, Penalty rates are a penalty on jobs. The higher the penalty, the higher the barriers are into employment - putting the job market further out of reach for the most disadvantaged Australians.
There are businesses right around the country that have stopped trading on Sundays because penalty rates are prohibitively high. Case after case, we hear of family-owned small businesses that run on skeleton staff on a Sunday because they are unable to afford the extra penalty rates.
James Pearson, chief executive officer of the Australian Chamber of Commerce and Industry, has argued for the importance of reducing penalty rates as a job creation measure given the depressed state of the Australian jobs market. Pearson has noted the 725,000 Australians out of work, including 259,000 young people.
Pearson has argued, Reducing penalty rates for businesses in retail and hospitality will give them greater capacity to open their doors longer, take on more staff and give them more hours. The Restaurant and Catering Association found it could create 40,000 jobs.
2. Consumers access to the hospitality and retail industries and the quality of service they receive will improve
It has been argued that those recreating on Sunday and seeking the services of pharmacies and other retail outlets, cafes and other hospitality venues will be better provided for. It has been claimed that more venues will be able to operate on a Sunday and staff levels will be higher so service will be better.
It has also been argued that goods and services may well be offered to consumers at a lower than the current rate on a Sunday. According to this argument, when Sunday penalty rates are reduced the surcharges presently imposed in many eateries will also be reduced.
This point has been made by John Freebairn, professor of economics at the University of Melbourne, who has stated, Clear gainers from lower Sunday penalty rates will be households and consumers. They will have access to a larger range of goods and services throughout the whole week, and some prices will be lower than otherwise.
It has also been claimed that the quality of service offered will improve because reduced penalty rates on Sundays will enable employers to use more experienced employees on this day. With current penalty rates in place, employers claim they cannot afford to use their more expensive, experienced staff.
Fred Harrison, chief executive of Ritchies IGA, the largest independent grocer across New South Wales, Victoria and Queensland has claimed he is looking forward to being able to put some more experienced staff back on the weekend roster. Mr Harrison has claimed that the ability to employ these more skilled staff will enable Ritchies to provide a higher level of service than is currently possible on Sundays.
Mr Harrison further stated, We are still going to employ those 15, 16 and 17-year-olds as we always have but this will be a bit of a win for our older casuals.
Citi's head of research Craig Woolford has stated, The reality is retailers will add additional staff on Sunday and may pass some [savings] back through lower prices.
The Business Council of Australias chief, Jennifer Westacott, has stated, The onus is now on employers to demonstrate that modest reductions of this kind can mean more hours for workers and better service for customers.
3. Sunday employment is no longer a significant imposition on workers
It has been claimed that the social and cultural conditions that once made Sunday work disadvantageous for workers no longer apply and so workers do not need to be compensated with additional wages for working on Sundays.
Phil Lewis, Professor of Economics, University of Canberra, has explained the origin of penalty rates. He has stated, The name penalty rates suggest businesses must pay a penalty for imposing conditions which disadvantage employees. However, penalty rates have their origins in the early 1900s in a labour market quite different to that of much of the Australian labour market today.
A similar point was made in an editorial published in The Age on February 23, 2017. The editorial observes that one of the historic objectives of penalty rates was to make it unattractive for employers to require their workers to work on Sundays. This was a reflection of the social value then attached to Sundays as a day of religious observance and an opportunity for families to be together. The editorial notes of penalty rates, They were supposed to deter employment and trading on Sundays.
It has been claimed that cultural changes in modern Australia make penalty rates an anachronism. Critics of penalty rates claim that such a disincentive is now beside the point as social and commercial practices have changed so much that a deterrent is superfluous. Church attendance has declined, sporting activities occur on days other than the weekend and commercial and retail activities occur throughout the week, including over the weekend.
The Age editorial argues, In response to community demand, Australia has long had a seven-day commercial week. Saturday is our biggest shopping day, and retail trading on a Sunday outstrips some weekdays.
Professor Lewis went on to explain why he believes that employees no longer need to be compensated for working on Sundays. He stated, While the majority may work standard hours and the weekends are the traditional periods for socialising, recreation, participating in sport and worship , this is not true for a large minority of workers For most people, working on weekends would not significantly impose on their time spent on sport and outdoor activities.
It has been claimed that for many people, students and mothers with partners who work away from home on Monday to Friday, for example, weekend work is actually an advantage. Professor Lewis stated, For many people working weekends allows them to earn income from paid employment while meeting commitments to unpaid activities such as study or household duties [on other days of the week].
The value of Sunday employment to students was noted in The Age editorial published on February 23, 2017. The editorial stated, Among those who stand to gain [from the increased Sunday employment resulting from a reduction in penalty rates] are the many young people who seek work in retailing and hospitality industries with flexible hours to fund their tertiary studies and other vocational training.
4. Many workers will not be affected and the penalty rates have been lowered less than was requested
Many supporters of lowering penalty rates have argued that the objective is not to harm employees and that the changes have not and will not be implemented in a way that would maximise potential harm.
Former Coles executive and now chief executive of the Tasman Market Fresh Meats chain, Matt Swindells, has noted that most employers will be careful to retain good staff relations and motivate good staff by not ruthlessly applying the Sunday wage reductions.
Mr Swindells has stated, I don't think it's just as simple as taking a loading away, you've got to approach it in a more measured way. You've still got to remunerate and incentivise staff properly.
It has been noted that some employees wage rate will not be affected at all as they are employed under enterprise agreements where Sunday penalty rates have been traded for other benefits. These agreements have traded-off some penalty rates in exchange for other provisions such as higher base rates of pay.
The head of research for the global bank Citi, Craig Woolford, has noted, The impact on retailers is varied, some retailers have enterprise agreements with lower than award Sunday rates. Most of Australia's largest retail operations pay their staff through enterprise bargain agreements, including Woolworths, Just Group and Super Retail Group. For in the vicinity of 300,000 retail workers (around one third of the total) there has been no reduction in penalty rates at all.
Given that many workers have seen advantage in trading away penalty rates for increased base-rates of pay, employer groups have floated a number of other options including the possibility of introducing a flat loaded hourly rate instead of penalties. Critics of penalty rates argue that their being swapped by workers for other benefits demonstrates they are no longer seen as necessary or significant by many employees.
It has also been noted that Sunday penalty rates are still higher than Saturday rates, despite the fact that employers groups argued that the Sunday rate be lowered to the same level as the Saturday.
Fair Work Commission President Iain Ross has stated, The Commission understands that while working Sundays might not have the level of disutility that it once did for workers, Sunday work still does have an impact and this formed part of the Commissions decision not to pull Sunday rates completely in line with Saturdays in the retail and hospitality sectors.
Mr Ross further noted, Except in fast food awards, we have not reduced the Sunday rates to the same rate as Saturday.
5. Lowering penalty rates will benefit the total economy
It has been argued that reducing penalty rates will see an increase in the supply of a range of consumer and hospitality services via increased employment, resulting in increased production and increased consumption.
In an opinion piece published in The Australian Financial Review Professor Phil Lewis, Director of the Centre for Labour Market Research at the University of Canberra, stated, A fall in labour costs will make otherwise unprofitable activities profitable so firms hire more people and produce more goods and services.
Professor Lewis further suggested, There will be more employment and increased turnover from both existing firms trading on Sunday and by firms deciding to start trading on Sunday Complementary industries, such as tourism, will benefit from customers having a greater range of choice and lower prices.
International Employment Relations Association is an organisation which represents and serves academics, practitioners, students and others interested in Employment Relations. In 2015 it posted the following comment supporting a reduction in Sunday penalty rates on the Internet site of the University of Western Australia, Not only will consumers benefit from longer trading hours and better quality customer service but hospitality and retail workers will benefit from increased employment opportunities. The implementation of this reform suggested by the Productivity Commission will stimulate growth in the Australian economy, while also addressing the issue of increased unemployment.