COSBOA Submission: Inquiry into Sunday Penalty Rates

By Peter Strong . On 03-Aug-2017

COSBOA’s submission to the Inquiry into Sunday Penalty Rates is below:

Thank you for the opportunity to provide input to this important inquiry.

A two-tiered workplace relations system

For the last six years we have seen a two-tiered workplace relations system operate in the
Australian retail and hospitality sectors. This has occurred with the introduction of the Fair
Work system and has allowed a union to manipulate the system to their benefit and to the
detriment of non-union members, to the detriment of those seeking weekend work and to the
detriment of small businesses.

One of the biggest unions in Australia, the Shop Distributive and Allied Industries Union
known commonly as the SDA, has negotiated cynical Enterprise Agreements (EAs) with
Australia’s largest businesses. These EAs give those businesses a competitive advantage on
weekends and provides the SDA with the opportunity to take money off Sunday workers and
use that to subsidise the weekday workers’ pay.

This is nothing more than abuse of the workplace relations system by a major union.
As mentioned above it seems the union has manipulated the system to benefit its members
(most of whom work weekdays) at the expense of Sunday workers who are in the main nonmembers.

This has also created competition problems for small businesses operating in retail and the
restaurant and catering sectors as well as in other sectors where Sunday work may occur.

The outcome for small businesses is that they are forced to pay much higher rates on a
Sunday than larger businesses. This often means that employing people on a Sunday is
uneconomical forcing the business owner to either close the business or run the business
themselves. The Restaurant & Catering Association has research that shows that 60,000 jobs
would be created if small businesses were allowed to pay the same Sunday rates as big

The fact is the SDA union has negotiated up to 100 Enterprise Agreements with large and
medium businesses across the country that not only pay lower than award rates to Sunday
workers but in some cases no penalty rates at all to other weekend workers.

Ethical and legal dilemmas

Small business people are now confronted with ethical dilemmas. We are often approached
by potential employees who state that they would work for the same rate as paid by
businesses such as Woolworths or McDonalds. A common response when a small business
person says it is not viable to pay double time on a Sunday and open the shop is ‘but I will
get time and a half at Woolworths why can’t I get it with you?’

We have told business people they must follow the award and not to break the rules. But they
of course ask the question ‘why can Woolworths do this and not me?’
We also have desperate people who need an income or who can only work on Sundays offer
to work for cash. This should not be happening but this situation has been created by a union
that cares nought for workers.

Who is at fault, the union or the businesses?

There is some belief that if these EAs are found to be lacking legally and ethically that the
companies involved should be held up as the main culprits as they signed the agreement and
put the agreements to the vote among their employees. This we believe is a false argument.
The undeniable fact is that there was one organisation involved in every EA that took pay
away from Sunday workers and that organisation is the SDA.

It is also absurd that a company can be blamed for accepting the recommendations of one of
the largest unions in Australia. The reality is that often if a company rejects the offer of a
union it is attacked and criticised in the media and elsewhere for not looking after their
workers. In this case the companies involved have agreed with recommendations of the
union and may still be criticised for not looking after their workers.

The only way that a company could take the blame for this is if the union involved was
palpably incompetent, the SDA is not normally recognised as incompetent.

What are the facts?

The questions that need to be asked by this inquiry, and answered, are:

In the relevant EAs that paid lower than award rates were weekend workers informed  that if they voted for the agreement that they would receive a cut in their penalty rates
and in their pay? If so how were they informed? A copy of the actual
communications with the workers, particularly Sunday workers, needs to be
presented. Our understanding is that the workers were not informed of pay cuts. If this
is a fact why did the SDA not inform workers that there would be a pay cut? Was this
deliberate or incompetence?

What information was provided to the Fair Work Commission to show that the ‘Better
Off Overall Test’ (BOOT) was satisfied for all the EAs? Were statutory declarations
presented that were not reflective of the facts. If so why were they wrong?

Did any workers complain after the agreements were in place? If so how were the
complaints managed? Our understanding is that aggrieved workers had to take their
own concerns to the Fair Work Commission and were not supported by their union.

When these questions are answered the Inquiry can them make recommendations on any
investigations that should take place and how to ensure transparency in EA negotiations.

Politics ignoring the facts & unions attacking businesses

This EA process and the way the information has been hidden has also created an opportunity
for politics to override facts. The debate presented by the unions and by the opposition give a
strong impression to the public that penalty rates are being decreased for vulnerable Sunday
workers when in actual fact the penalty rates were decreased for the majority of Sunday
workers by the union six years ago.

Several unions are ensuring that the facts are not given to the public by aggressively targeting
business people who say that they would employ people if the Sunday rates were the same as
the SDA negotiated rates. These unions do not care if a business person loses their business
and their health, and that their employees lose their jobs.

The fact that a Senate inquiry is being held into this issue provides the opportunity for
politicians to show they support facts and the law by condemning this union bullying
behaviour and seeking police investigations into these actions.

Changing the Fair Work Act to ensure that enterprise agreements do not contain terms
that specify penalty rates which are lower than the respective modern award.

To add to the hypocrisy of those denying Sunday penalty rate changes we see that there is a
push to guarantee penalty rates. We are not opposed to penalty rates, we are however
concerned that any demonstrative change will inhibit the ability of workers to negotiate with
their employers on matters that are important to them. There must be care taken that any
changes to the legislation does not remove the capacity for employers to be able to respond to
the needs of their employees and their business needs. Any changes should also not add
further complexity to the system.

The need for changing the Fair Work Act may provide an opportunity to remove complexity
and make the system easier to be understood by workers and employers who are not experts.
For example we could have a small business industrial award that is easy to understand and
easy to regulate. That would be a win-win for employees and employers. It would not be
seen as a win by the union movement who prefer to bamboozle workers so they can maintain
their role. Simplicity in regulation should be the aim of all players in the workplace relations

About the author

Peter Strong

  • COSBOA October Newsletter

    01-Nov Our October Newsletter is out! Check it out
  • Removing choice in superannuation funds only favours the fund

    24-Oct There is one good example of why we need independent directors on superannuation fund boards.  That
  • Small Business Should Receive 10% Commission on Superannuation Collected for Funds

    03-Oct COSBOA today called on the government to build on agreements between large retailers and the retail
  • COSBOA AGM, Council Meeting & Business Leaders Dinner – 25 October 2017

  • Historical MOU with Business Council of Australia

    29-Aug Last week we had a very successful Vodafone National Small
  • ALPs Access to Justice – it’s time to be nice

    14-Aug COSBOA today acknowledged the importance of the ALP’s legislation on ‘Access to Justice’ when
  • COSBOA Submission: Inquiry into Sunday Penalty Rates

    03-Aug COSBOA's submission to the Inquiry into Sunday Penalty Rates is below: Thank you for the opportun
  • COSBOA’s Cash Economy Submission

    02-Aug COSBOA provided a submission to the Standing Committee on Tax and Revenue who are conducting an inqu
  • COSBOA Communique – Business Continuity & CyberSecurity

    28-May Cyber Security, telecommunications failures, power blackouts, website failures, disaster
  • The Cyber Security Issue – COSBOA Council Meeting: 24 May 2017, Hotel Kurrajong, Canberra

    15-May   Cyber Security hit the headlines over the wee
  • Fairness in Competition Gets Ever So Close

    24-Mar COSBOA today congratulated the government on the approach to changes to Section 46 of the Competitio
  • SmartCompany: Let’s focus on the issues that unfairly affect women who run their own small businesses

    08-Mar Peter Strong's article for International Women's Day in SmartCompany: As a bloke I can only c
  • Save the Date: VODAFONE NATIONAL SMALL BUSINESS SUMMIT 2017: 23-25 August 2017

  • National Contract Fairness Day! It’s arrived

    10-Nov Let’s celebrate the coming of fairness – the start of better innovation,
  • Who pays for double dipping in paid parental leave?

    24-Oct There are several ways of working out who pays for the double dipping in paid parental leave (PPL).
  • Payment of invoices – Australia comes last

    18-Aug Australia has easily found itself in last place when it comes to paying invoices on time.  We come
  • Competition in the Boardroom – a play in one act

    11-Aug At COSBOA we receive all sorts and we were lucky enough to be sent a small business play that reall
  • Census 2016 – Embracing Change

    10-Aug The events last night with the Census should not be used to attack and criticise or indeed to make u
  • Communicate, Engage, Involve, Communicate – that’s what a successful pack of dogs will do.

    16-Jul The Greyhounds decision is a great example of decision making gone wrong.  Perhaps the decision was
  • Contribute to the Campaign

    10-Jun After the article in The Australian 
  • COSBOA Vodafone National Small Business Summit Registrations Open!

    27-May It’s exciting when the months of planning start to come to fruition and the registrations for the
  • Pay taxes, stop dodging, stop playing games

    11-Apr The CosBullet – Tax collection needs fixing Below is an edited excer
  • 29,000 people support the government’s decision on the effects test – let’s get back to business

    30-Mar Petition to be presented to Kelly O’Dwyer at 2.30pm in the Minister’s office in Canberra
  • The Thinkers Hub – A Small Business Poem

    01-Mar It was somewhere up the country in a town built from rock and scrub That they formed a little busine
  • Is Competition policy decided by a few mega businesses and their union?

    19-Feb The development of better competition policy in Australia is vital to our future.  It is vital for
  • Penalty Rates: Sunday, fairness & jobs

    27-Dec There is a lot of carry-on around penalty rates.  The ideologues of the left want this to be a wedg
  • Security remains an issue – alert not alarmed, vigilant not a vigilante

    14-Nov Small Business people and the nation’s security National Security Hot
  • Tax reform can be managed – see Howard

    12-Nov Tax reform can be managed as long as we are all part of the reform process. Tax re
  • How many duopolies does it take to change a light globe in an aged care home?

    17-Oct In all the debate about the changes to Section 46 of the competition legislation (and the weird over
  • Latest argument for NOT having an Effects Test is just as silly as all the others.

    23-Sep  Trigger warning – Some jargon,
  • The dominant few big businesses are yesterday’s economy

    15-Sep Congratulations to Malcolm Turnbull and commiserations to Tony Abbott. With the change of Prime M
  • Our Champions are under threat from greedy, vested, rich corporate and union muscle

    11-Sep In the world of politics and influence there are some basic facts,
  • Misleading headlines don’t help the cause

    10-Sep Recently I was interviewed by The Guardian about the Effects Test and I made the normal comments and
  • When it’s your money – the game changes

    05-Aug The recent focus on politician's allowances and expenditure reminded me of a story I heard some year
  • Shopping Centres still playing with the facts

    26-Jul Shopping Centre Council misses the mark – as always Recently the Shopping Centre
  • Peter Strong’s National Press Club Address – 1 July 2015

    01-Jul COSBOA's CEO, Peter Strong delivered an address at the National Press Club on Wednesday, 1 July 2015
  • Peter Strong to Address National Press Club

    23-Jun Our CEO Peter Strong will address the National Press Club on Wednesday 1 July 2015.  Australia curr
  • COSBOA Chair addresses Maltese Chamber of Commerce

    17-May COSBOA Chairman and CEO of the Real Estate Institute of Australia (REIA) Amanda Lynch was in Malta r
  • Can we regulate the regulators?

    17-Apr Now is the opportunity to get information to the Productivity Commission, and through them the gover
  • 2.5 million people deserve better

    21-Mar COSBOA is extremely disappointed that we will once again have a new small business minister. The sm
  • Submission to the Senate Inquiry into the new Anti-Discrimination Acts

    05-Jan COSBOA Submission to the Senate Inquiry into the Exposure Draft of Human Rights and Anti-Discriminat
  • The Year that was -2012 – and the Year that will be – 2013 an election year

    19-Dec Please see our review of 2012 and needs for 2013
  • NAB and COSBOA announce new secondment to enable greater collaboration

    14-Dec COSBOA is pleased to announce the secondment of Janett Egber from National Australia Bank (NAB) who
  • Simplicity in Legislation Creates Productivity

    20-Nov This is an article written by John Strong,
  • New Taxation Commissioner – what does it mean for the self employed?

    14-Nov The government has announced the replacement for Michale D'Ascenzo (a great small business supporter
  • Small Business Champion for 2012 – Ondina Gregoric

    04-Nov It is with great pleasure that the Council of Small Business of Australia announces Ondina Gregoric
  • Coles and Woolies – still bullies

    03-Nov Great
  • Small Business in Asia – an example

    28-Oct Examples of some businesses established by Jaquillard Minns in Philippines during the last 5 year
  • Asian Century? Small business people are there already.

     COSBOA welcomes the release of The Asian Century White Paper today by the Prime Minister J
  • Is there a sea change in the way small business is viewed and treated?

    14-Oct Is something happening in Canberra around small business?  There have been some significant changes
  • Join the COSBOA board and other members at the October dinner with guest speaker Minister for Small Business, The Hon. Brendan O’Connor and Steve Lewis from the Canberra Press gallery

    11-Oct Book the 30th of October for a dinner at the National Press Club where our guest speakers will be Br
  • Australian Livestock and Rural Transporters Association

    05-Oct The ALRTA are members of COSBOA and they,
  • No job is better than $15 or $24 an hour? How?

    03-Oct COSBOA has provided a submission to the Senate inquiry into the Fair Work Act and penalty rates.  C
  • Submission to the Senate Inquiry into Penalty Rates

     Submission to the Fair Work Amendment (Small Business – Penalty Rates Exemption) Bill 2012
  • Join the COSBOA board and other members at the October dinner with guest speaker Minister for Small Business, The Hon. Brendan O’Connor.

    18-Sep Book the 30th of October for a dinner with Brendan O'Connor and other members and guests of COSBOA -
  • A Carbon Tax Calculator in the language of small business people – cash flow!

    23-Aug Why do we need a
  • Peter Strong’s Address to the National Press Club on 8 August 2012

    22-Aug Thank you ladies and gentlemen and special thanks and acknowledgement to the Deputy Chair of COSBOA,
  • How to define a small business? (well firstly we are all people)

    16-Aug Just what is a small business?  We currently have a range of definitions by a range of government a
  • The 2012 Economic Forum, the Asian Century and Innovation

    15-Aug COSBOA has two representatives at the Prime Minister’s Economic forum to be held in Brisbane this
  • Big win for owners of small trucking businesses – about time too

    19-Jul Congratulations to the Australian Livestock and Rural Transporters Association