Multiple industry peak bodies have warned against increased workplace regulation after Prime Minister Anthony Albanese vowed to protect penalty rates through new legislation.
Albanese’s promise comes after recent lobbying by the Australian Retailers Association (ARA) to simplify the General Retail Industry Award (GRIA), which included allowing managerial-level staff to choose between being paid penalty rates as usual or opting for a salary that matches their expected annual pay.
Unions and other groups have since called this an attack on penalty rates altogether.
“We will support your penalty rates,” Albanese said. “It shouldn’t be taken for granted. One of the things that people rely upon to get by is their penalty rates."
"We want Australians to earn more and keep more of what they earn, which is why it is a good thing that real wages are increasing and taxes are decreasing under my government."
In retaliation, the Australian Chamber of Commerce and Industry (ACCI), the Council of Small Business Organisations Australia (COSBOA) and the ARA claimed further regulation could threaten the survival of Australian businesses and undermine opportunities for job growth and creation.
It follows the recent collapse of multiple retail businesses, including Wittner, Tuchuzy, Ally Fashion, and Jeanswest in the fashion space alone in recent months. Some of these were reportedly due to rising costs, including wage increases and shop rents.
ACCI CEO Andrew McKellar said Australian business is at peak regulation and overwhelmed by red-tape and complexity.
“Employees want choice and flexibility and that needs to be at the heart of any workplace proposals. Business needs that agility to survive. Tying Australian businesses up in knots around workplace systems has the effect of strangling growth - and that means less jobs and lower wages,” McKellar said.
McKellar added that denying choice and flexibility to employees about their own work and pay arrangements is out of touch with the global 24/7 economy.
“There is more volatility coming for Australian businesses, through the trade wars and increased global competition,” McKellar continued. “That is where our government's focus urgently needs to be.
“From energy, fuel and rent, to wages, insurance and transport - the costs of doing business have risen obscenely. Whether we like it or not, that influences what Australians pay at the checkout. The cost-of-living-crisis, and the cost-of-doing-business crisis, are directly linked and we need policies that recognise and address that.”
ARA chief industry affairs officer Fleur Brown said penalty rates will not be removed under its proposal to the Fair Work Commission.
“What’s proposed is that retail managers can opt into an annualised salary which provides greater income and financial stability and would see them on average $5,841.65 better off annually,” Brown said.
“On the one hand the Federal Government has been saying it wants to provide a system where Australians have more flexible work options, but on the other hand it seems intent on stopping common sense efforts to achieve this.
“It’s also just another example of why it’s so hard to survive as a small business in Australia.”
Meanwhile, COSBOA CEO Luke Achterstraat said reducing and not adding complexity will help small business.
“According to the Reserve Bank of Australia, more than three-quarters of recent insolvencies have been small businesses with under 20 employees,” Achterstraat said.
“In the retail sector alone, employers must navigate 994 different pay rates across 96 pages just to ensure their employees are paid correctly. It’s unworkable.
“Red tape and complexity is undermining the viability of Australian small businesses. It’s not sustainable. We need to make sure our workplace system supports economic growth and productivity, job security, and fair opportunities for employees and employers alike.”
In a separate statement, The Australian Industry Group CEO Innes Willox said the new proposals to enshrine penalty rates in legislation are "a job killer”.
"The dust still hasn't settled on the recent waves of radical IR laws and Labor are unfortunately already rushing to announce further unbalanced and unnecessary changes in response to union thought bubbles,” Willox said.
"Our workplace laws are already ludicrously complex, outdated and restrictive and actively discourage business investment and employment, especially of young Australians who will be the main victims of this proposal.
"If Labor genuinely wants to assist with the cost of living pressures it needs to spell out a pathway to addressing our failure to lift productivity so that businesses can afford to deliver the sustainable wage rises everyone wants to see.”
Willox added that Australia is now suffering the lowest economic growth outside of Covid since 1991.
“We saw a 9.2 per cent increase last year in closure of businesses that had been operating for over five years – that is the shuttering of 151,000 businesses. This proposal, if enacted, will signal the death knell for many more.”
In a statement prior to Albanese’s comments over the weekend, the Australian Council of Trade Unions (ACTU) claimed that individual retail workers stand to lose $5,000 a year in wages earned through penalty rates, allowances and overtime through the proposal by the ARA – a view that the ARA rebukes.
The ACTU also noted that the attacks on penalty rates have spread beyond the retail sector to target workers in administration, banking and finance.
According to the union body, key employer lobby groups have made submissions to the Fair Work Commission to remove penalty rates and other award protections in exchange for a one-off pay increase.
Analysis by the Australian Services Union shows these proposals would cost individual clerical workers up to $12,000 per year in wage cuts.
ACTU secretary Sally McManus said Australian workers deserve to be paid fairly for staying back or working anti-social hours at night and weekends.
“Penalty rates help workers in retail, admin, and finance – most of whom are women – to earn enough income to support themselves and their families,” McManus said.
“During the last Coalition government, Peter Dutton voted against protecting penalty rates eight times, after the Fair Work Commission cut penalty rates in similar circumstances in 2017.
“If re-elected, businesses would pile on, in a race to the bottom to junk penalty rates just as quickly as they could line up at Michaelia Cash’s door under a Dutton government.”
ASU secretary Emeline Gaske lashed out at Australian Industry Group's proposed changes to the Clerks Award.
"The changes will see the abolition of overtime pay, penalty rates on public holidays, annual leave loading, rosters, paid breaks and a whole range of other hard-won allowances. It’s a full-scale attack on the rights of one million hard working people," Gaske said.
“Every office worker in the country should be concerned about this – big business is planning to cut penalty rates and overtime for admin workers, the backbone of Australian business. Workers having their penalty rates stripped and being forced to do unpaid overtime would be devastating to take-home pay during a cost-of-living crisis and set a dangerous precedent for every other award in the country.
“We’ve seen this playbook before, cut wages and conditions bit by bit until there’s nothing left. The ASU will fight tooth and nail to stop it. Workers can’t afford to go backwards.”