Five reasons to defend penalty rates

Reading Time: 3 minutes
Photo: Shutterstock
Photo: Shutterstock

Weekend penalty rates are back on the election agenda. The politics might be different but nothing has changed about the reasons employers and employees alike should reject a weakening of conditions.

A month after Prime Minister Malcolm Turnbull described penalty rates as ‘out-dated’, the Productivity Commission recommended changes for workers in the entertainment, hospitality and retail industries that would bring Sunday rates into line with Saturday rates.

Election rhetoric has put further pressure on the Fair Work Commission which has been asked to rule on employer applications to reduce Sunday rates in these industries.

The traditional capital and labour divide has always been evident in the public discussion about penalty rates and it sets the stage for the trading of blows between our leaders on the best way forward for jobs, productivity and the economy.

What the major parties do have in common is a concern for Australia’s future and in particular the economic legacy that will be left for current and future generations.

It’s a pity the major parties couldn’t work together and come up with a bi-partisan approach to the big issues like taxation that could save Australia from an outdated tax system that neither party can possibly change on its own.

In this context the proposed changes to penalty rates might not look like much to someone who works Monday to Friday, but their impact on take home pay for weekend workers is huge.

A reform that comes at the expense of the most vulnerable workers is hardly innovative and follows hot on the heels of both Liberal and Labor support to cut family payments by $60 per week for two parent low income families.

It is not despite the 24-hour seven-day-a-week economy, but precisely because of it that we must retain penalty rates in order to ensure our lowest paid and most vulnerable workers and their families can make ends meet.

It’s not just a good thing to do, it prevents a slippery slope to continued erosion of pay and conditions for those who are already struggling and prevents reductions in rates for the rest of the workforce.

Australia already faces growing labour shortages in the health care, aged and disability care sectors and can ill afford to make these sectors less attractive to prospective employees.

We live in a community not an economy. While the notion of the Sabbath may have lost some currency in our secular society, there is a continued need for a day of rest, a day for family and friends and a day to worship.

Penalty rates rightly compensate weekend workers for losing out on this precious time so that the rest of us may enjoy ours.

If you’re not convinced, here are five great reasons to defend penalty rates:

Vulnerable workers will have their pay cut – reductions will disproportionately affect Australia’s lowest paid workers, who rely on penalty rates to protect their living standards, and have a major and often devastating impact on these workers and their families.

Flow on reductions will hurt the economy – reductions in low paid workers’ incomes will have adverse consequences on their ability to purchase goods and services from other businesses.

Sundays are still ‘special’ – Sunday retains special status for Australians as a day preserved for rest, recreation and family time, particularly for parents with children. Research shows that quality time is essential to keeping families strong and a key time for religious worship.

Two tier system is unfair and discriminatory – it is fundamentally inequitable to treat the retail and hospitality industries differently to others such as nursing, aged care and police where existing penalty rates will and should continue to be paid.

No evidence new jobs will be created – there is no reliable evidence or economic analysis that removing penalty rates will boost employment and job creation. Even if there was, it is not morally acceptable to reduce unemployment by lowering the wages of the most vulnerable.