Cuts to penalty rates don't create better and more secure jobs

09 April 2015

I’m passionate about ending age based wage discrimination and protecting workers’ pay and conditions, and have been since I began my working life in the hospitality sector.

Both as a hospitality worker and later when I began work as an organiser for United Voice I saw first-hand the impact of low youth wages and importance of penalty rates to everyday workers trying to make ends meet and can’t support any agreement which cuts penalty rates.

Cuts to penalty rates do nothing to create better and more secure jobs.

In truth, many of the jobs and industries that employers campaign to cut penalty rates are where the lowest paid employees in Australia work. This is especially so in the hospitality and retail sectors which additionally employ a high proportion of Australia’s young workers earning minimum wages.

At no stage have employer groups such as the Australian Chamber of Commerce and Industry (ACCI), Restaurant and Catering Australia and the ACT Chamber of Commerce, who actively campaign to cut penalty rates, ever demonstrated any benefits for workers or our community at large. And we know from other countries that a race to the bottom on wages is not the answer to unemployment.

This is a serious issue that affects approximately 4.2 million Australian workers entitled to penalty rates - 1 in 4 people in Belconnen alone are in casual or part-time work. Cutting penalty rates has consequences for all workers including those in retail and hospitality as well as cleaners, security workers, nurses, aged care workers and bus drivers to name a few.

While on the surface this is most evidently an Industrial Relations issue it’s clear to me as Minister for Housing and Homelessness and Minister assisting the Chief Minister on Social Inclusion and Equality that any move to cut penalty rates and employment conditions will take money out of the pockets of some of the lowest paid workers in our community.

Cutting a worker’s take home pay will mean students take longer to complete their studies or might not be able to study at all, others will be unable to pay their rent or mortgage, or buy food, and many people would be forced to seek 2nd and 3rd jobs just to make ends meet – meaning less time at home with their friends, family and kids.

For all of them it means less time to socialise and an increased chance of social isolation.

A key argument for cutting penalty rates is that in our 24/7 modern day world, weekend and evening work is more common and therefore there shouldn’t be differentiated weekend and evening pay rates.

Yes, work outside of the regular 9-5 hours from Monday to Friday is becoming more common, but night, weekend and public holiday hours of work continue to be unsocial.

Not all days and times at work are equal. Sunday is not the same as a Tuesday, day is not the same as night and we all know events with family and friends, such as birthday parties, going to see a band, movie or sports event are overwhelmingly scheduled on weekends, evenings and public holidays.

Here in the ACT the Canberra Liberals have said a number of areas of red tape, including weekend penalty rates, needed to be re-examined (code for cut). Mr Andrew Wall MLA said; “There needs to be appropriate flexibility to meet the needs of young people and students and help them earn a bit of pocket money, be it enough to facilitate a bit of a social life or be self sufficient while they are undertaking further studies".

Let’s be clear, most workers aren’t just working for pocket money while they study. Even if they are, they don’t always choose to work weekends and nights out of choice.

Recently Business SA, South Australia’s peak Chamber of Commerce, stated that agreement with the Shop, Distributive & Allied Employees' Association SA & NT Branch (SDA) was reached which “significantly reduces the penalty rates, for retailers in SA, on weekends and public holidays”.

Former Liberal ACT Chief Minister and current Australian Chamber of Commerce and Industry (ACCI) Chief Executive Kate Carnell said in response to the deal reached in SA; "I applaud both parties for recognising that penalty rates are an impediment to retailers opening at certain hours and therefore inhibiting growth in jobs and work hours".

While the agreement is a matter for the SDA and their members its effect is likely to be felt beyond the SA border and used by employers elsewhere, including here in the ACT, to campaign for cuts to penalty rates.

I have and continue to support the SDA’s “100% at 18+” Campaign which seeks to end the practice of paying young workers at a percentage of the minimum wage until they reach the age of 21. But I can’t support any move that cuts wages and conditions.

Cutting penalty rates will have an impact on the quality of a workers life beyond their workplace. People who support their family, pay for rent, food and petrol and deserve a fair day’s wage for a fair day’s work - which compensates them for working unsociable and irregular hours. 

Before employers and their representatives call for penalty rates to be cut, they should try working during Christmas or Easter on a public holiday, or a Sunday night shift, or have their loved ones forced to. Then I wonder if they’ll feel the same.