EDITORIAL: How much to pay people for working on Sundays

13/02/2019 Posted by admin

AT its essence, the debate about penalty rates centres on the appropriate level towhich employees should be compensated for working outside of normal hours.
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But as the Fair Work Commission points out in the opening sections of itshistoric decision to cut Sunday and public holiday penalty rates in six hospitality and retail awards, penalty rates were originally as much about deterring employers from scheduling work outside “normal hours” as it was to compensate employees for working them.

Hence, it would seem, the name “penalty rates”. But as the commission notes, things have changed so much since then that “deterrence” is no longer a “relevant consideration” in setting weekend and Sunday penalty rates. Old notions of a time to work, and a time to rest (with the country sliding to a near halt on the Sabbath)are more or less irrelevant in a society where many of us,especially in cities, want our retail and hospitality providers open seven days a week, if not around the clock.

And if we expect those retailers to open, we must accept that they need to be able to trade at a profit to do so. With the commission proposing to cut the affected penalties by up to 25 per cent, the question is whether these reductions in individual earnings will lead to more work overall –and so a greater benefit to more people –or whether it will embolden employers to seek further rate cuts, in the same way that a once “progressive” tax system has become progressively flattened.

In examining the pros and cons of this decision, there is no doubt that many of those affected are in low-paying jobs. As such, they are likely to rely heavilyon the extra income from Sunday shifts. But as various media investigations have shown in recent years, a number of employers –some of them high-profile –are already paying well under the going rate, regardless of what the law says. In other situations, unions and employers have voluntarily agreed to ease weekend penalties in exchange for higher general hourly rates of pay, arguing that such arrangements meet the commission’s “better off overall” test.

In hindsight, not all of these deals have worked out well for employees. With this in mind, the commission should keep a very close eye on the impacts of this decision, and be prepared to reverse it if the benefits promised by employers do not eventuate.

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