Russell Zimmerman
Australian Retailers Association executive director
As executive director of the Australian Retailers Association (ARA), I constantly hear from and speak to those in the retail industry about the biggest issues they face. Being able to attract, employ and retain staff in an environment which must remain responsive to modern consumer demands is currently one of the biggest issues impacting the sector.
Fashion and footwear is especially sensitive to the delicate balance between the cost of employing staff during the hours consumers most want to shop and the viability of operating a business during those hours. On top of this is the abundance of choice and flexibility customers have when it comes to spending in discretionary categories such as fashion, which present retailers with the constant challenge of remaining competitive on a global scale and relevant to their niche markets.
The ARA has recommended four major Modern Award reforms to Fair Work Australia (FWA) in its submission, which calls upon FWA to consider modern retail conditions, consumer demand for 24/7 shopping and promote employment in a sector responsible for 1.2 million jobs.
The four key recommendations are:
1. Variation to the definition of ‘general retail industry’ to include online retailing of goods and services, ensuring those employed in online retailing are covered under the Award.
2. A reduction in the Sunday penalty rate from 100 percent to 50 percent would assist in the challenges facing the industry to trade seven days a week while ensuring employees have access to jobs and flexible hours.
3. Removal of unnecessary administration involved in changing the hours of a part time worker by agreement, which impedes both part timers’ access to flexible hours and employers’ ability to ensure hours worked are productive.
4. Reducing the minimum shift requirement for employee training sessions to allow retailers to adequately train staff, which they are currently unable to do without significant costs involved.
The ARA welcomed the opportunity to form a submission for what is the first meaningful review of how the GRIA is affecting the retail sector, and we believe the submission proposed sensible and fair variations in order to promote employment and social inclusion throughout the retail sector- both now and in future.
Key considerations for the retail sector are retail now being a seven day working week and the fact that where a consumer chooses to shop- online or in store- is fast becoming irrelevant. We are currently seeing many retailers respond to these realities through multichannel initiatives, better opening hours and other innovations which need support through fairer employment conditions under the Modern Award.
In the fashion industry, initiatives such as virtual fitting rooms, full- blown e-commerce platforms and branding campaigns all seek to integrate the experience for the consumer, wherever they choose to shop at any given time. Ultimately however, people are and always will be the drivers of the retail industry, and roles will be more diverse as it evolves.
As such the ARA welcomes its role as the link between industry and regulation to achieve fairer outcomes towards productivity in a $240 billion sector.
Jo Kellock
Council of Textile and Fashion Industries of Australia CEO
The recent changes to the TCF Labour Regime March 2012 (FWA, TCFAI Award & deeming provisions) extend the operation of most aspects of the Fair Work Act to textile, clothing and footwear (TCF) contract outworkers. The TCF regime creates a “catch all” for the fashion industry, where an ‘outworker’ is defined as an individual who, for the purpose of a contract for the provision of services, performs work:
(i) in the textile, clothing or footwear industry;
and (ii) at residential premises or at other premises that would not conventionally be regarded as being business premises.
Unfortunately the deeming provisions can capture a large number of non-employing SMEs (ABS data indicates there were over 2,300 in 2011) who unwittingly fall into relationships and perform work which deem them to be outworkers. According to Minister Shorten in his second reading of the Bill ‘under the recent changes in the TCF Amendment Bill 2011 the person who directly engages a TCF contract outworker will be treated as their employer.’
Whilst it is yet to be tested in a court of law as to whether this still applies to non-employing SMEs who accept work from multiple entities, the TCF Regime can also draw in boutique owners and retailers who are directly instructing designers to make to an order e.g. colour ways, trims etc and deem them to be ‘principals’.
Unaware that in giving instruction or in purchasing first orders from a young designer who works from home, retailers are then burdened with all the obligations of an employer i.e. they must employ the young designer with full benefits and entitlements and guarantee them a minimum of 20 hours per week ongoing work. It is possible to terminate that employment in line with the minimum NES i.e. with one weeks’ notice.
We believe that this added risk placed on retailers will have a consequence…. boutique owners and retailers are likely to be less willing to purchase Australian made fashion from emerging designers.
“This is an absolute tragedy for the fashion sector as many of our famous fashion brands started at the kitchen table.”
Department officials stated at a February 2 Senate Committee Fair Work hearing that the new amendments will make it easier to prosecute offenders who breach the outworker provisions in the award.
It is important that retailers understand the difference between employee entitlements and employer obligations and insist on supply chain transparency when purchasing product. They also need to be aware of recovery of unpaid amounts provisions in the new legislation.
Where retailers supervise or otherwise control the performance of work of the goods they sell which is produced by or of a kind often produced by outworkers they can also be responsible for recovery of unpaid amounts. This includes wages or commission as well as other amounts owing in relation to particular work.