This is a topic which has been brought up recently among the year 12 year level on the common room white board and on the Facebook page. That is that on the 23rd of February Fair Work Commissions cut Sunday penalty rates for part time and casual workers in hospitality, fast food and retail industries, which will come into effect as of 1 July 2017. I imagine that this would be a very important change to a lot of you who have part time and casual jobs in these industries. These changes where supported by Malcolm Turnbull who believes they are an “appropriate objective and [the liberal party] certainly welcome transition arrangements that mitigate as far as possible or offset the impact on the take-home pay packet”.
So what are the actual changes that are taking place on Sunday penalty rates? Well here they are from an ABC news article:
The penalty rate for full-time and part-time employees will be cut from 175 to 150 per cent.
There’s no change to the Sunday rate for casuals which will stay at 175 per cent.
In fast food:
The Sunday penalty rate will be reduced for level one employees from 150 to 125 per cent for full-time and part-time employees and from 175 to 150 per cent for casuals.
There’s no change to Sunday penalty rates for level two and three employees in that award.
The Sunday penalty rate for full-time and part-time employees will be taken down from 200 to 150 per cent.
The Sunday rate for casuals will be reduced from 200 to 175 per cent.
The rate for full-time and part-time employees for work between 7:00am and 9:00pm on Sundays will be reduced from 200 to 150 per cent. The Sunday rate for casuals will be reduced from 200 to 175 per cent.
So what do these changes mean for workers and small businesses?
Most obviously, the change in penalty rates will mean that part-time and casual workers who work on Sundays (mainly students, and people with families who are not the main source of the families income) will get less money from hours they work on Sundays, which in turn will mean they have less money to spend. It is also argued that this is not fair compensation for time that could have been used to spend with family, at sporting events and other social activities. On the flip side, these changes is welcomed by many small businesses who have complained that they have had to reduce their number of staff or even restrict operating hours to exclude Sundays due to the high cost of wages. This will mean that businesses can stay open on Sundays, providing more goods and services, as well as employ more staff on these days which allows for better quality of service. However, there is no guarantee that businesses will actually employ more staff on Sundays, which would mean that the changes could have no positive effect for these workers at all.
What is my view on the issue?
Well to be honest I’m not quite sure what side I take, I think there is a good chance this change could end up being good or bad (maybe you can try to convince me of one outcome with a good comment). However, one of my family members brought up something interesting that I hadn’t really thought about, that is that just because the Government is not regulating it as much, doesn’t mean that wages are guaranteed to stay low. If price of wages decreases then supply of labour is likely to contract which would force employers to increase the wages they offer in order to attract more workers (increased demand). This is to say that by decreasing government intervention we are leaving the price of wages more up to the powers of a free market.
image from The Age