Paying penalty rates means potentially profitable periods like Easter are a dead zone
- Ross Greenwood
- From: The Daily Telegraph
- April 23, 2014 4:24PM
IF you wandered around cities or country towns over Easter and wondered why nothing seemed to be open ... get angry.
The main reason is this: penalty rates.
The argument for penalty rates is that people don’t like to be inconvenienced having to work on weekends or public holidays.
So they should be paid extra money for losing that time with family.
That sort of argument might have flown in a different era — the 1950s maybe — but in a 24-7 world, it makes no sense.
For example, you can now internet shop any day of the year, at any time.
You can do your banking, trade shares and order pizza.
It makes no difference to you if this happens to fall on a Sunday, Tuesday or Easter Monday. In other words, your shopping and consumption habits have changed.
But the rules regarding penalty rates have barely moved.
Under the previous Government they went backwards, as enterprise bargaining agreements and workplace contracts were stiffened up by Fair Work Australia.
The Labor government called it “modern awards” — perhaps the worst misnomer ever attributed to any piece of Australian law.
“Modern awards” mean’t employers often had to pay their employees higher hourly rates.
This weekend waiting staff who worked on the four days declared public holidays by the state government earned up to double time and a half their normal rate.
You can see the impost on employers.
And the general rule of thumb for expenditure for many small businesses is this: quarter rent, a quarter wages, a quarter stock and a quarter profit.
But if you double the wages bill a public holiday, the maths tells you the owners profit share from the business quickly evaporates.
That’s where the lack of fairness lies; and it’s why so many shops and tourism attractions were closed over Easter.
And far from helping all employees (some, it should be said, prefer to work weekends because it helps couples with child-rearing) penalty rates are a handbrake on youth employment because if businesses close on weekends, there is less opportunity for young workers trying to get a few shifts.
But if the Federal Government says it can’t stop this archaic system — at least not before another Federal Election — then a simple way to tweak it would be to follow the NSW Business Chamber’s model.
That is to pay people their normal-time wages on the first five days they work (be that Monday to Friday or Wednesday to Sunday).
Then, if they work an extra day — they should then be paid some form of penalty rate.
I recognise this as a compromise — but at least it’s better than the system we have now.
