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Why the FWC decision to cut penalty rates will impact all retail & fast food workers

Mar 1, 2017News

Reports in today’s The Australian (2/03/17) make incorrect claims about the role of enterprise bargaining and the impact of the FWC decision on workers.

It has also been argued that the FWC decision on Sunday Penalty rates is no different to the union movement’s ‘rolling up’ of penalty rates during the process of EBA negotiations. This is fundamentally incorrect.

The practice of ‘rolling up’ penalty rates, that is, moving their value into a higher base rate of pay or improved conditions has been a long-standing practice used by many unions since the 1980’s and approved by the ACTU.

This approach has been successful in delivering flexibility for employers and has always retained the value of penalty rates in worker’s total take home pay.

Enterprise bargaining in this manner has consistently delivered strong rights and working conditions as evidenced by the fact that Australia’s fast food workers are some of the highest paid in the world.

Unlike the ‘rolling up’ of penalty rates as part of EBA negotiations the FWC decision is a straight cut to workers take home pay with no compensation. This is an important point which is consistently omitted.

Despite claims that only ‘285,000 workers would be affected’ by the FWC decision, all workers in the retail and fast food sector (over 700,000), whether on an award or EBA will eventually have their take home pay cut.

The award sets the floor for the negotiation of all EBAs. Once Sunday penalty rates are cut to 150%, no employer will then be willing to offer 200% or any compensation for their removal.

Workers will simply not be able to secure wages they could have received if the FWC decision had protected penalty rates.

Arguments now coming from the business sector and Turnbull Government that relatively few workers will be affected are particularly disingenuous given the frantic nature of their calls to cut penalty rates prior to the FWC decision.

The business community cannot run both arguments that ‘Sunday penalty rates are destroying the economy’ and now claim ‘workers on EBA’s have nothing to fear because their pay won’t be affected.’

For over 25 years the SDA has been successful in delivering strong wages and protecting conditions against a wide range of attacks from conservative State and Federal Governments. The fact is union bargaining does deliver for workers.

This FWC decision on Sunday penalty rates however, means that all retail and fast food workers take home pay will eventually be cut, a fact that no one, either in the Turnbull Government or business community is willing to own.