Fair Work president suggests replacing penalty rates with “loaded” hourly rates
Fair Work Commission president Iain Ross has bought into the penalty rates debate with a radical idea that would see penalty rates replaced by a “loaded” hourly rate to be negotiated between a boss and employee.
Addressing the Australian Financial Review retail summit yesterday, Mr Ross said introducing a “loaded” penalty rate would make the penalty rates system less complex.
He said it would be particularly good for small business.
“A loaded rates schedule would allow small businesses to access additional flexibility, without the need to enter into an enterprise agreement,” Mr Ross said.
The issue of penalty rates is highly contentious with lobby groups like the Australian Retail Association calling for a reduction in the rates which can double the payout for people working Sunday shifts.
Mr Ross noted that a 2013 review of penalty rates by the full bench of the Commission found that “loaded” penalty rates could help to reduce the complexity of the penalty rates system.
As an example of how it could work, he cited the Hospitality Industry Award.
“Clause 27.1 of that award provides that an employer and employee can enter into an ‘alternative’ arrangement to the payment of the weekly minimum wages prescribed in the award,” he said.
“In essence, and subject to some important safeguards, they can enter into an agreement to pay the weekly rate plus 25 per cent in lieu of the entitlement to penalty rates and overtime.
“I am not suggesting that this provision is necessarily appropriate for the retail industry. But it should be possible to develop a schedule to the award which provides that employees are paid a higher, ‘loaded’, hourly rate of pay – in lieu of an entitlement to penalty rates.
“There would need to be appropriate safeguards and interested parties would be given an opportunity to comment on any proposal.”
He said the commission had received 6000 submission for its review into modern retail awards.
He said loaded hourly rates was a separate issue to the penalty rates review but would be considered when it was finished.
by Leon Gettler, September 30th 2016
