PM, unions should get with the program

Judith Sloan
March 15, 2013
The Australian

ASK small business owners what aspects of the Fair Work Act trouble them the most and the answer will come in two parts: penalty rates and the unfair dismissal provisions.

Does this worry the Labor government? Not at all. After all, it is not a supporter of small business. It should come as no surprise that Julia Gillard would serve up yet another favour to her trade union mates by enshrining penalty rates in law.

Virtually no one in the government has any insight on the pressures that small business owners face.

Speaking to an ACTU conference on insecure work – note that union leaders continue to peddle the ludicrous figure of 40 per cent of the workforce in insecure work – the Prime Minister pledged to enshrine penalty rates in the FWA.

How her pledge will actually be fulfilled is unclear.

But the rhetorical overreach in the Prime Minister’s speech – “improving the living standards of millions of Australians” – suits her at this stage.

Penalty rates are a relic of the past, of a time when men worked full-time, mostly in nine-to-five jobs, and women stayed at home. They were designed to discourage work in non-standard hours, not to reward it.

Fast forward to the present, and the majority of women work, many in part-time jobs. School and university students are keen to take on part-time employment. So-called non-standard hours of work are their preferred hours.

Fathers can look after children while mothers go out to work. Students can combine their studies with paid employment.

We all expect to shop when we want to shop and eat in the evenings, during weekends and on public holidays. We also need to be aware that businesses need to earn adequate returns to operate their businesses and to open in the evenings, at weekends and on public holidays.

It is increasingly common to see restaurants closed on public holidays. It is simply uneconomic for the owner to open.

It is a case of lose-lose-lose. The business owner cannot use the idle capital and workers are not offered hours of work which they would be grateful for, even at much lower rates of pay. Potential customers are turned away.

There is a relatively simple solution to the penalty rates conundrum. By inserting preferred hours clauses in awards and agreements, employers can offer hours of work that suit their workers’ preferences and for which no penalty rates would apply. For other times, penalty rates would apply. An alternative solution would involve workers being eligible for penalty rates only after a certain number of hours per week have been worked.

The union movement needs to get with the program and acknowledge that the workforce has changed since penalty rates were first inserted in awards. Many workers prefer to work outside the nine-to-five, weekday straightjacket and the law should reflect this fact, not discourage it.