SDA kicks own goal as bosses target penalty rates

In March the Shop, Distributive and Allied Employees Association (SDA) signed a “template” agreement with Business South Australia to reduce penalty rates for weekends, evenings and public holidays.

It is not binding on any employers or employees yet, but can be used as a framework for bosses to sign agreements with their employees, and would allow the SDA to expand its coverage.

This comes as the media and politicians portray penalty rates as an existential threat to business.

Over Easter the Australian Chamber of Commerce and Industry went on the offensive, distributing posters for businesses to display on shopfronts that blamed penalty rates for being closed or having fewer staff. But it backfired as customers boycotted shops displaying the signs. Kate Carnell, the head of the ACCI, complained that businesses had been “intimidated”. Erin from Newcastle told the ABC she had cancelled her wedding reception at a restaurant that displayed the sign, saying, “The only reason that my wedding reception was there in the first place was because I could afford it because of penalty rates.”

But penalty rates haven’t hobbled the hospitality industry. Spending growth in restaurants and cafes has grown twice as fast as in the retail sector, while employment growth was double that of general employment.

Most of us recognise penalty rates as compensation for working anti-social hours. Without them the pay packets of the poorest in society would be decimated.

The Abbott government lacks the mandate and political capital to launch an open assault on penalty rates, but clearly has them in its sights.

Two reviews this year will be used to bolster the case for “reform,” and may lay the groundwork for attacks on penalty rates if the Abbott government wins a second term.

Under the Fair Work Act the Fair Work Commission reviews awards every four years, with the next one due this year. In their submissions to the inquiry employer groups have targeted penalty rates for review, especially in the hospitality industry.

The government’s submission, unsurprisingly, encourages the Commission to “consider the impact of employment costs on employers’ decision to hire workers over the next four years” in light of the headwinds facing the Australian economy.

The second review of industrial relations has been launched by the Abbott government through the Productivity Commission. The Productivity Commission says its investigations will include whether penalty rates should be deregulated so they are set at an enterprise level, rather than by the Fair Work Commission as is currently the case. This would mean that without the protection of award rates weaker groups of workers would eventually see their penalty rates eroded away by employer demands.

Labor’s response

But it’s clear a change of government won’t safeguard penalty rates, or other workers’ rights. Showing himself to be completely out of touch with ordinary workers, Labor leader Bill Shorten hailed the SDA’s deal with Business SA as proof the industrial relations system works.

Shorten’s role in undermining penalty rates goes beyond simply supporting the SDA’s concessions. As Workplace Relations Minister in 2013 he amended the Fair Work Act to compel the Commission to review penalty rates. Now the Abbott government is hoping this review will help undermine them.

But while the Abbott government is currently not in a position to abolish penalty rates, business is pressing ahead to attack them at an industry level. In February the SDA made another abject capitulation, signing a deal with Coles that would erode entitlements like penalty rates, sick leave and casual loading for new employees, while sidelining the unions of current employees.

The SDA’s national agreement covers all new Coles employees previously covered by state-based agreements reached with the Meatworkers’ Union (AMIEU) and Transport Workers’ Union (TWU).

The AMIEU’s Victorian state secretary says this would leave new butchers and meatpackers $300 a week worse off than employees covered by the existing state agreement.

The national agreement replicates a previous deal the SDA struck with Safeway/Woolworths that traded away conditions and pay for meatworkers.

The AMIEU has responded to this threat with 24 hour strikes in Victoria and is urging Coles workers to vote NO to the agreement. According to the AMIEU, Wesfarmers, the owner of Coles, made a profit of $1.38 billion in the six months to 31 December 2014.

Industrial action like that by the meatworkers can force Coles to pay its workers decent wages and form part of the wider defence of penalty rates as they come under attack.

By Lachlan Marshall


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