Common sense approach to changing penalty rates framework
The Chamber of Commerce and Industry Queensland (CCIQ) says the Fair Work Commission has adopted a common sense and practical approach to penalty rates for the retail and hospitality sectors.
CCIQ State Manager for Advocacy Kate Whittle said that contrary to fears penalty rates would be abolished, the commission has arrived at a solution that works for employers and employees.
“Today’s decision has not seen an abolishment of penalty rates altogether, but a more sensible approach to how penalty rates are applied so small and medium businesses can continue to thrive and employ,” she said.
Ms Whittle said the commission had delivered some important reductions in excessive penalty rates on Sundays and public holidays in several industries, but denied them in others.
She said the changes would give many Queensland small businesses the opportunity to hire more staff and give more hours to existing staff.
“The policy behind penalty rates represented a failure to recognise the requirements of industries operating in the 24/7 economy, such as retail, tourism, accommodation, and hospitality.”
Ms Whittle said CCIQ had consistently argued for changes to penalty rate provisions to allow for greater flexibility in businesses that operate outside of standard trading hours.
“Penalty rates are a drain on productivity and Queensland business competitiveness. Reform has been long overdue,” she said.
“Queensland businesses have resoundingly told us that they want a workplace relations framework that meets the needs of their contemporary workplaces and positively impacts on their productivity and competitiveness – and penalty rates were a top priority.
“The current penalty rates regime inhibits economic growth by providing a disincentive to employers from having longer trading hours or offering staff additional hours.”
Ms Whittle said Queensland hospitality and retail businesses were prevented from tailoring their staffing arrangements to the peak demand periods for their products and services as a result of penalty rates.
CCIQ has extensively surveyed and spoken to thousands of businesses across the state on this issue and their responses included:
• They were seriously concerned about facing increased global competition with the current penalty rates regime in place
• The current system was impacting on their ability to trade profitably, particularly with changing consumer demand
• The impact of penalty rates was more acute for the hospitality and retail sectors
• Continued increases in wage costs forced businesses to close for longer periods and/or reduce staffing numbers
• They accepted penalty rates as a legitimate labour cost, however wanted to see alternative approaches for specific industries.
Ms Whittle said CCIQ representations to the Fair Work Commission had demonstrated that employers reduced overall employment hours to the direct detriment of existing and potential employees, including young workers, as a result of the imposition of penalty rates.
“There has been a strong desire for reform. The majority of businesses told us they support the continued regulation of penalty rates,” she said.
“The preferred solution was to reduce penalty rate loadings, which creates an incentive for businesses to increase employment hours.”
CCIQ participated in the Productivity Commission’s review of workplace relations, which considered penalty rates reform, and made several representations on behalf of Queensland small businesses to the Fair Work Commission’s four-yearly review of modern awards.
CCIQ consistently advocated for an increase in the scope of the current system to allow for greater flexibility with respect to the operation of penalty rates, particularly for those businesses that operate seven days per week or outside standard trading hours.
“The Fair Work Commission has heard the case of Queensland small businesses and today’s announcement indicates the commission is now taking a practical approach to penalty rates,” Ms Whittle said.
“The changes reflect the contemporary 24/7 nature of our economy and will best serve the needs of small business, their employees, and the nation’s economy.”