FWC examine proposal to trade off penalty rates for higher hourly pay

EWIN HANNAN
September 29, 2016
The Australian
Tens of thousands of retail and fast-food employers would be able to trade off penalty rates and overtime for higher hourly pay without the need for a workplace agreement, under a “historic” Fair Work Commission proposal that delivers increased flexibility to small business.
Commission president Iain Ross announced today that the tribunal would investigate changes to the retail and fast food awards that would allow employers to pay a higher rate of pay in exchange for penalty rates and overtime.
Small business representatives hailed the announcement as “historic”, and predicted the move would deliver increased flexibility and simplicity for small business through the nation’s award system.
The commission proposal is expected to be strongly resisted by unions and there will be intense debate before the commission about the rate that should be applied to compensate for the loss of penalty rates and overtime
Small businesses have long complained they are disadvantaged by the current system given major retailers have struck contentious enterprise agreements with the shop assistants union that apply “loaded” rates to tens of thousands of workers.
Under the commission proposal, the so-called “’loaded rate” would be included in a schedule to the award and would benefit award-covered employers who would be saved the cost and time involved in negotiating an enterprise agreement.
“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,’’ Justice Ross said.
“There would need to be appropriate safeguards and interested parties would be given an opportunity to comment on any proposal.”
He said small businesses face a number of practical impediments to entering into enterprise agreements.
“A loaded rates schedule would allow small businesses to access additional flexibility, without the need to enter into an enterprise agreement,’’ he said.
The hospitality industry award allows for loaded rates, with employers and employees able to enter into an argument that pays 25 per cent above the weekly rate in lieu of overtime and penalty rates.
The commission intends to examine the issue next year with a decision likely by the end of 2017.