Penalty Rates: Sunday, fairness & jobs


By Peter Strong . On 27-Dec-2015


There is a lot of carry-on around penalty rates.  The ideologues of the left want this to be a wedge for the next election as do many far right wing ideologues who want to decrease all penalty rates.  They aren’t helpful in the debate.

This is not about scrapping penalty rates it is about Sunday penalty rates in retail, hospitality, the services sector, manufacturing and associated businesses where we have a two tiered workplace relations system. It is not about emergency services, health and the like.

The people mentioned in the first paragraph will ignore the second paragraph.

The real issues are:

Big businesses pay lower penalty rates on Sunday than small business because the big businesses can afford to get an enterprise agreement in place. EG Coles, Woolworths and Bunnings pay time and half on Sundays while small business in the same industry sector has to pay double time.*

If we achieve common sense and drop the Sunday rate then those people currently on the higher rate would quite rightly feel aggrieved. To help manage any change those that are currently on double time or the higher penalty rate in the case of hospitality (mainly in small businesses and there won’t be many) will maintain the higher rate.  Any new employees would be on the same penalty rate regime as if they were working in big business.

The biggest union in Australia, the SDA which is the union for retail, support lower rates on Sunday.  The SDA has over 10% of all union members in Australia so we can assume this is a balanced opinion.

There are people who want to work on Sundays but can’t find a shop that is open that will employ them.  Many of these people can’t get jobs in Coles and Woolworths and places like McDonalds because they have a poor employment history or failed the entrance test.  They want to build up their CV so they can get a full time job but are basically banned from working on weekends. The current system works against these people.

Most people who can only work on weekends would rather work in a small business or small restaurant/cafe not in a big chain. They would rather be a person employed by another person not a number in an uncaring big business.

People in country towns in particular who can only work on weekends are penalised by the decisions made by those in positions of power who have never met them but make decisions on their behalf. These far away decision makers have decided that a person who wants to work on Sunday for time and a half must be protected from themselves.

*The enterprise agreements in big businesses provide lower penalty rates on Sunday and a slightly higher pay rate during the week. It would be interesting to know if the tens of thousands of employees in big business who only work on weekends were informed that they would be disadvantaged by the agreement?  Did the union send them a note saying “don’t vote for this agreement it is bad for you”.

There is an argument that small businesses should increase their pay rates during the week to allow for lower penalty rates on weekends but this punishes the small businesses who don’t open on weekends.

The penalty rates in many places in Australia were lower before the Fair Work System came into place so high penalty rates on Sunday is not an historical fact, it is a recent introduction. The small business had their costs arbitrarily increased by people that know nothing about small business.

At least 10,000 people will get a job if the Sunday rate was at the same level as big business. It is probably closer to 50,000.  No one would lose a job or money as a result of this type of decision. This decision would have no impact on the biggest employers in Australia or their employees.

This decision would allow more shops and restaurants/cafes to open on Sundays increasing competition.

As per the Productivity Commission report the emergency service workers (not those from the service sector) would keep their current conditions – all good, all OK.

About the author

Peter Strong

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