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Issue #1734      June 8, 2016


Penalty rates a test of commitment

Weekend penalty rates have become an electioneering hot potato. The Fair Work Commission (FWC) is due to release its decision on whether to cut the Sunday rate to the Saturday level soon after the July 2 poll. The attitudes of the big two parties and the Greens are very instructive and have given voters a lot to think about in an election where growing income inequality and corruption have become central issues.

The Liberals and Labor are making a great show of respect for the “independent umpire” as it considers the employers’ application. Turnbull & Co are confident that pressure from big business and precedents already set by deals in the retail and fast food sector will get the pay-cutting measure across the line. Labor says it will use its influence with the Commission, including the making of a submission, to preserve current penalty rates. If the FWC backs a cut, would-be PM Bill Shorten has undertaken to abide by the decision.

Mr Shorten, who was embarrassed during the Heydon Royal Commission about a penalties-scrapping deal brokered during his time at the head of the Australian Workers Union, is confident the FWC will see sense. Asked what exactly he would do if the Commission backed the cut he replied – “Well sorry, what if alien life makes contact with earth?” While insisting “that only a Labor government can be trusted to protect our penalty rates system”, he is resisting taking any practical measures to guarantee that outcome.

The Greens lit a fire under the issue with a call for legislation to safeguard current penalty rates. Mr Shorten and some right wing leaders in the trade union movement have called the proposition “nuts”. Aside from showing a lack of faith in the “independent umpire” it would, they claim, load a gun for a future Coalition to fire. If Labor legislates to preserve workers’ rights, the Coalition could simply get back in and legislate them away. This strange defence ignores the fact that both Labor and the Coalition have been legislating away the gains made by the trade union movement for a very long time now. The Fair Work Act and the gutted “modern award” system are testament to that.

Unions Victoria has backed the demand for legislation. Victorian Trades Hall Council secretary Luke Hilakari agrees penalty rates should be added to the current 10 minimum employment entitlements contained in the National Employment Standards. The Shop, Distributive and Allied Employee Association (SDA), which has negotiated a number of penalties-slashing deals lately, has suggested that if the Sunday rate cut was endorsed, that Sunday shifts should be purely “voluntary”. Anybody with experience with retail employers will attest to how unrealistic such an arrangement truly would be.

In the meantime, workers have witnessed wages growth at an 18-year low. The 7-Eleven virtual slave labour scandal reveals itself to be the tip of a very big iceberg. Experts are warning that “disruptive technologies” like Uber and Airtasker could create a new hi-tech Hungry Mile where workers wait at the whim of the wealthy to carry out a low paid chore. Woolworths is in strife for engaging contractors to collect trolleys at very low rates of pay and in an atmosphere of intimidation.

A glimmer of hope that the FWC will come down on the correct side of the penalties question was a recent decision to veto an SDA-brokered pay deal between shop assistants and the Coles supermarket chain. A case brought to the FWC by trolley worker Duncan Hart found that the deal has cost low-paid workers around $70 million a year. Some were as much as $3,500 a year worse off. The agreement failed the “Better Off Overall Test” miserably.

This case notwithstanding, it would be foolish for workers to buy the “independent umpire” snake oil. Action by unions supported by the community is the only way to protect and advance the interests of workers against the employer onslaught. The call of the Greens for legislation to protect penalty rates should be supported. Actions protesting the outrageous, super-exploitation of low-paid workers must be supported, also. The election won’t resolve the underlying problems manifesting themselves in scandalous newspaper headlines. The struggle for radical change of the system will go on. As capitalism slips deeper into crisis the need for organisation and bold action will increase regardless of the outcome on July 2.

Next article – Hands off our ABC

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