Weekend penalty rates under threat thanks to South Australian deal

Retail workers in South Australia could lose weekend and holiday penalty rates.

Workers in the South Australian retail sector — particularly young, casual workers — could lose their penalty rates thanks to a deal between retail employers and the Shop Distributive and Allied Employees Association (SDA).

The deal was reached after nine months of negotiations between the union and Business SA, the state's Chamber of Commerce and Industry. Business SA said the deal was a "landmark" agreement, “which significantly reduces the penalty rates, for retailers in SA, on weekends and public holidays".

The outcome is a template enterprise agreement that could be adopted by small to medium sized businesses if staff and management agree. If taken up, it could apply to about 40,000 workers — two-thirds of retail workers in the state. All agreements reached would need to be vetted by the Fair Work Commission.

Under the agreement, penalty rates would be abolished entirely for week nights and Saturdays, cut from 100% to 50% for Sundays and from 150% to 100% for public holidays. In exchange, employees would receive higher base pay, a "guaranteed" 3% annual pay rise and the right to refuse to work on Sundays and public holidays. Permanent staff would have the right to two weekends off out of four.

SDA South Australian secretary Peter Malinauskas justified the deal as targeting “those small business retailers who employ workers under award conditions, which are inferior to the conditions we have fought for and won for SDA members".

Malinauskas said the template agreement “provides for a 14.54% increase to the base rate of pay between now and July next year". It “provides exceeding benefits to workers including a higher base rate of pay, guaranteed every Sunday off and every second weekend off plus some improved penalty rates for casual workers.”

The Australian Chamber of Commerce and Industry said it would like to see the deal replicated across the country. ACCI CEO Kate Carnell said on March 24: "This deal can provide a workable example for other employers and unions across the country keen to overcome the barrier to growth posed by penalty rates. We are hopeful agreements like this can flow across Australia."

But not all business groups are in favour. The Australian Industry Group sees worrying similarities to pattern bargaining.

The deal has been welcomed by federal employment minister Eric Abetz, minister for small business Bruce Billson, and Labor national president and frontbencher Mark Butler.

In the context of a frontal assault on penalty rates by Tony Abbott's government and employer groups via the Productivity Commission and the Award Modernisation process, this deal is worrying. What might be argued as “smart” tactics by one union in one sector of its membership through a deal with employers could result in employer pressure across the retail and other sectors to reduce penalty rates through stripping away award conditions using individual flexibility agreements (IFAs) or variations to future enterprise agreements.

It is guaranteed that employers across the hospitality and other sectors will seek to follow this example. They will argue that if the SDA accepted it in retail, then other unions should accept it elsewhere.

The so-called voluntary nature of these agreements and the “right to refuse weekend work” assumes a level playing field between employers and employees. But how long would someone last in a job if they, for whatever reason, regularly turned down Sunday or public holiday shifts?

Young people, including students, are often employed as casuals in retail, where they rely on weekend penalty rates to make a decent income while studying during the week. Employees under the age of 20 in the retail sector still receive “junior” rates of pay, making penalty rates an important source of income. Other workers rely on penalty rates to survive in their job and make ends meet, due to limited shifts being available each week.

This deal comes at the same time as the SDA has been negotiating a national agreement with Coles supermarkets, which has drawn criticism from the Australasian Meat Industry Employees Union (AMIEU) and other unionists, on the basis that, if agreed, it will reduce the wages and conditions of Coles butchers and meat workers.

[Rob Graham is an activist in Socialist Alliance in Adelaide.]

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