Penalty rates cut reflects lifestyle changes

Hospitality workers face Sunday penalty rates cut but could the move create more jobs?THIS week’s Fair Work Commission decision to cut Sunday penalty rates in retail and hospitality awards is a sensible and reasonable compromise.

It not only seeks to balance the needs of employers, workers and consumers, but reflects the fundamental social and economic evolution of our nation.

But should the commission have gone further and ruled there is no longer any significant distinction between Sunday and Saturday and made the penalty rate the same for both days?

In response to community demand, Australia has long had a seven-day commercial week. Saturday is our biggest shopping day, and retail trading on a Sunday outstrips some weekdays. Thus, a primary element of the commission’s rationale for reducing Sunday penalty rates is to remove the deterrent effect that was part of the original design of those rates. They were supposed to deter employment and trading on Sundays (and, to a lesser extent, on Saturdays), clearly an anachronistic notion in the 24/7 world in which we live and which has brought much benefit and flexibility to the community.

The commission, in rejecting calls by employers and the Productivity Commission, a publicly funded public policy research organisation, to lower the Sunday rates to those of Saturday, is seeking to maintain the other core motivation behind weekend penalty rates – compensation for time away from family and social activities, which are still concentrated on weekends.

Also pivotal to the commission’s decision – which came after a lengthy process in which all parties had their say – is its assessment that lower business costs will stimulate employment and provide consumers with better and longer service.

One Warrnambool cafe operator, who currently does not trade on Sundays, says the penalty rates change may prompt him to become a seven-day a week operation.

While existing south-west weekend workers will be aggrieved at having their pay slashed, the possibility of more businesses opening could in turn create new opportunities for workers with potentially more jobs.

The commission’s decision could also have an important benefit for regional cities like Warrnambool with significant tourism industries. Tourists regularly complain about the reduced offerings in Warrnambool’s CBD on Sundays. If more businesses opened, that would be good for the region.

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