Debate about award rates continues as hospo industry looks to COVID-19 recovery
Penalty rates are a much debated issue in Australia, with very little agreement between unions, employer groups and employees.
In December 2020, Industrial Relations Minister Christian Porter called for the workplace tribunal to implement a single-loaded wage rate to replace penalty rates for COVID-19 affected industries.
A decision on penalty rates was to be made by March 2021.
Porter argued that due to the pandemic, it was in Australia’s best interests to allow retail and hospitality sectors to pay their award staff a loaded rate, which would substantially reduce award classifications.
"While ultimately any design of loaded rates would be up to the discretion of the commission, it is the government's view that these rates may be optimally structured in a way that ensures workers are not financially worse off over time," Mr Porter said at the time.
Since then, the hospitality industry, notably restaurants and cafes, have stayed clear of weekend penalty rates.
Further to this, registered clubs are pushing for all-in rates without any requirement to audit them.
Mr Porter called for submissions from unions and employers to be handed to the Fair Work Commission. Hospitality groups put forward their proposals for award flexibility last week.
Understandably and not unexpectedly, the Australian Council of Trade Unions is opposed to loaded rates, award exemptions or classification changes unless they met a “high bar” for approval.
The case is expected to be heard next month, with a decision to be made shortly after that would aid in the country’s economic recovery.
A call for a simplified award system
Restaurant & Catering Australia wants a single rate to roll up eight allowances in its award.
The rate would include meals, split shifts, equipment and clothing. It would also include late night and early morning penalty rates triggered after 10pm or before 6am.
According to R&CA chief executive Wes Lambert complications arise due to the differing natures of restaurants and cafes: as restaurants are open mostly in the evening and cafes during the day, it is difficult to come up with one rate that includes weekend, public holiday and overtime penalties suitable for both.
“There’s just no way to do that that doesn’t lead to one of the workers either receiving either inordinate pay rises or someone receiving significantly less take home pay,” he said.
“We’re trying to keep our reform proposals in line with the problems we see can be fixed by the award. It’s pragmatic and practical ... there are only winners here.”
Further to this, R&CA wants to reduce award classifications from 11 to a three-tiered stream.
This would apply to kitchen workers, cooks and food and beverage attendants and would allow these staff members to perform specific tasks without running into strict classification barriers.
For instance a barista making coffees, washing dishes (if necessary) and preparing baguettes could currently fall under three different classifications.
“We say that’s not how the industry’s working on a day-to-day basis,” Lambert said. ”So let’s make it really simple for workers to do those kind of very broad jobs and do it in a way that doesn’t leave any employee worse off.”
Lambert believes these changes could culminate in pay rises for those under certain classifications.
Clubs Australia (CA) proposes two loaded rates for weekdays and weekends in the clubs award.
Notably CA is looking to exempt workers in the five lowest classifications from the award if they “voluntarily” agree to pay 33 per cent above the standard rate.
This type of arrangement was in place in NSW before the national modern award was implemented in 2010.
Six different options for loaded rates in their award have been proposed by Hotels and pubs. These would cover overtime, weekend penalty rates and some allowances: a single 110 per cent rate for Monday to Friday, up to 40 hours a week, 119 per cent for Monday to Saturday and 128 per cent for Monday to Sunday. Rates of 135 per cent are available for 45 hours maximum a week.
Australian Hotels Association chief executive Stephen Ferguson said it “was very difficult to come to one number because of the better off overall test” and he did not expect the options to be attractive to all employers.
“The rates have to be equitable and attractive for both workers and employers to have the greatest coverage.”
In any discussion, the ACTU has said “a rigorous process is required to ensure all proposals are adequately scrutinised and do not potentially entrench, promote or otherwise enable wage theft”.
ACTU assistant secretary Liam O’Brien said, “Essential workers, like those in hospitality and retail have gotten us through this pandemic. Any attempts by employers to use this process to cut wages and entitlements will be fiercely opposed.”
Irit Jackson, 1st February 2021
