Weekend work rates under scrutiny

For almost 100 years, Australians in a range of industries have been paid extra for working weekends.

It was a recognition that those who gave up spending time with family and friends and worked over the weekend deserved some level of compensation.

Today, these rates are under fire from business and industry groups, who claim they are so high that it makes opening on weekends barely worth while.

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They're also in the sights of federal politicians, who want to see some businesses freed from having to pay their employees more for working on Saturdays and Sundays.

This month retail giant Myer said it was considering closing the doors of some stores on Sundays.

Myer chief executive officer Bernie Brooks said it was because weekend penalty rates paid to employees - including double time on Sundays - were too high and made it financially pointless to open some stores on that day.

At the same time, independent senator Nick Xenophon is trying to amend the Fair Work Act.

His bill proposes that small businesses in the retail, catering and restaurant industries with fewer than 20 employees be made exempt from paying penalties - unless employees have worked more than 10 hours in a 24-hour period, or more than 38 hours in a week.

A review of the Fair Work Act is under way, with several bodies representing industry groups calling for the removal of the penalty rates.

At the same time, those bodies representing workers maintain they are a vital part of the wages system.

One group asking Fair Work Australia to change the structure of penalty rates is the Illawarra Business Chamber (IBC).

"Most pieces of legislation have to go through a form of cost-benefit analysis," IBC CEO Mike Leask said.

"The Fair Work Act was pushed through without that. Therefore there was a review process two years after the implementation of the act to look at what changes the legislation had made to the environment it was meant to address.

"The key issue is that we live in a 24-7 society these days and business needs to be able to adapt and be flexible to the demands of the market.

"What we're finding is that there are too many restrictive practices within the Fair Work Act which don't allow businesses to be flexible and be able to structure workforces to meet those demands without incurring penalty rates."

The IBC, which is conducting an informal survey of Illawarra businesses in regards to the effects of penalty rates, has joined forces with the NSW Business Chamber to lodge a submission to the Fair Work Act review to vary rates of pay on weekends.

Their proposal would see automatic penalty rates on weekends abolished (although public holidays would attract a time-and-a-half penalty rate) and replaced with a scheme whereby employees would receive a penalty rate if they had to work on six or more consecutive days.

A sixth day would be time-and-a-quarter while a seventh and all subsequent days would be time-and-a-half for full and part-time employees.

Therefore an employee could be rostered to work from Thursday to Monday and receive no penalties.

One of the arguments made to support penalty rates is that it acts as a reward - or even an enticement - for people to give up their weekends. But that's an argument Mr Leask doesn't agree with.

"The question is 'why should they?' - that's probably the real question," he said.

"You've got people, like students, who can't work during the week because they're studying or they've got some traineeship; they want to be able to work on a Saturday or a Sunday.

"The businesses are struggling to the point where they're saying it's not financially viable to open. If you close, then the worker loses their right to work. They lose their right to any money because the business isn't even open."

United Voice looks after the rights of a range of workers at risk of losing penalty payments. National president Michael Crosby rejected the argument

that penalty rates alone were forcing businesses to close.

"People will still want to go out for a meal or a coffee during the weekend and they will still need to go shopping for the necessities and treats of life," Mr Crosby said.

"It is only fair that workers who can't join in those activities because they are making them possible for the rest of the community should be compensated for not being able to join in.

"It's worth remembering that labour costs are just one of the costs of running a business. In the food services industry for example, the latest available figures for 2010-11 revealed that labour costs are just 29 per cent of total expenses."

He also claimed that the business argument over whether penalty rates were too high was a furphy, because they weren't pushing for a reduction but their total removal.

"What some employers are trying to do is get rid of penalty rates completely for work on Saturdays and Sundays," he said.

"So this isn't about whether penalty rates are too high; it's about whether there should be penalty rates at all. If employers did not have to pay extra when they require their workers to work on the weekend, Saturday would become just another day of the week and so would Sunday."

The business lobby groups received some bad news this week, with the Gillard government refusing to entertain calls to reduce penalty rates. The opposition also declined to voice support for the removal of penalties, possibly because they are still haunted by the ghost of John Howard's election-losing WorkChoices package.

"The Gillard government's view is that protecting penalty rates and public holiday loadings in modern awards is right and fair," Workplace Relations Minister Bill Shorten said.

"Australia may have seven-day-a-week shopping and the like but we should not surrender the concept of weekends and getting the balance right between work and family time.

"The idea that you should have to trade in that family and home time for nothing is not the Labor way."

The Department of Education, Employment and Workplace Relations has also made a submission to Fair Work Australia in support of penalty rates.

It suggests that employees could lose 10 per cent of their wage - or more - and said that without penalty rates they may simply decide not to work.

"There is evidence that lower penalty rates may make it harder to attract appropriate staff because employees may refuse to work during weekends and other unsociable hours if penalty rates were not on offer to compensate for that disadvantage," the submission said.

Scott Woods, owner of Ruby's at Mount Kembla, said it was a possibility that removing penalty rates could make it harder to attract workers for weekend shifts.

"It's a hard situation - maybe you'd just have to trial it and see what happens," Mr Woods said.

"Most of my staff and most people I talk to and know around Wollongong would be still happy to work on the weekends - because it is extra money in the end."

Mr Woods, who feels Saturday and Sunday shifts should be treated the same as those on a weekday, said his business was certainly affected by weekend penalties.

"It does affect me a lot because Ruby's only trades on Fridays, Saturdays and Sundays, so I'm always having to pay those extra penalty rates for Saturdays and Sundays," he said.

"It's a bit annoying. It doesn't seem quite fair in a way because that is our trade, opening on weekends when other people are having time off."

Not all restaurant owners would like to see the end of weekend penalties. Murphy's Bar and Grill owner Joy Wells is in favour of employees being paid extra on weekends.

"Why should you give up your time with your children for no benefit?" she said.

"They might be given Tuesday and Wednesday off but their kids are at school Tuesday and Wednesday.

"I feel that for them to sacrifice their family time, there should be a reward for it. And that reward should be that they get paid more."

The Unanderra restaurant is open Monday to Saturday and on Sundays for special occasions.

Mrs Wells said cancelling weekend penalties would make it hard to find staff for shifts on Saturday and Sunday.

She also said that while removing penalties would help the employer, it would hurt the employee.

"It needs to be a win-win for the employer and the employee. When it's not a win for everyone then it doesn't work."

Andre Charadia, a second-year journalism student at the University of Wollongong, works part-time at Bunnings in Narellan for $19 an hour.

The removal of penalty rates would create a substantial drop in his pay.

"I work Sundays, not regularly, but enough that it would have a big impact on my income if I didn't have the penalty rates," Mr Charadia said.

"It might mean a couple of hundred dollars a fortnight less in my pay cheque than normal. For a student, that's quite a big chunk of money.

"I live at home so it's not something that stresses me out too much, but for a lot of other people who rely on that bit of extra income to pay the rent, or pay bills, it can be a really, really big chunk."