Small Business Ombudsman says legislate 'take-home pay orders' for Sunday cuts

David Marin-Guzman
Mar 2 2017

AFR 

Small Business Ombudsman Kate Carnell has called on the federal government to legislate for “take-home pay” orders so that employees affected by cuts to Sunday penalty rates can maintain their pay.

But the proposal has met strong resistance from employer groups who say it would negate the positive effects of the Fair Work Commission’s penalty rates cut for business.

Ms Carnell said take-home pay orders were a more effective option than Prime Minister Malcolm Turnbull’s proposal on Thursday to phase in the cuts over as long a period as possible.

“I think most small businesses will continue paying staff at the level they are now but, if there were any that didn’t, it would be good to have a mechanism to do something about it,” she said.

“I think one of the things that will go a long way to solve this problem is to ensure the Fair Work Commission has the capacity to issue take-home pay orders.” 

Employees previously applied to the Fair Work Commission for take-home orders that preserved their pay when their rates were cut during the nationalisation of state awards in 2010.

The Fair Work Commission raised the possibility of the orders in its penalty rates decision but said it was unclear whether they were available in cases of award amendments.

Ms Carnell said the orders “could take away some of the angst in this space and facilitate the transition into the new award structure”.

“I think it quickly closes the gap – given the gap is so little,” she said. “There’s also not many people who work Sundays for eight hours – a lot of them are junior casuals [unaffected by the cuts].”

She rejected Senator Eric Abetz’s proposal to grandfather Sunday rates for existing workers as a “big mistake” that would produce a “two-tier system” and “a nightmare of complexity as time goes on”.

In contrast, the need for take-home pay orders would “evaporate over time” as annual increases in base rates made up the shortfall.

Ms Carnell said she would be making submissions in favour of the orders as part of Fair Work’s determination of the transition period for Sunday cuts.

Asked whether legislation was necessary to clarify that the commission could make the orders, she said “I think it does”.

However, Australian Industry Group chief executive Innes Willox said it was “essential the positive effects of the [penalty rates] decision are not negated through ‘red-circling’ of the pay rates of existing employees, or through the resurrection of take-home pay orders”.

He argued take-home pay orders had “a particular purpose related to the original award modernisation process and should not be used for other purposes”. 

Australian Chamber of Commerce and Industry chief executive James Pearson opposed bids to legislate, saying the Fair Work Commission was “where this issue should be decided”.

The commission will hold a hearing in May on its provisional view that Sunday rate cuts be phased in from July 1 in at least two stages.

Read more: http://www.afr.com/news/policy/industrial-relations/small-business-ombudsman-says-legislate-takehome-pay-orders-for-sunday-cuts-20170302-gup13k#ixzz4aDMhZZxj

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