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UPDATE 2.30pm: Bendigo Trades Hall Council president Martyn Stradbrook expressed his disappointment with the Fair Work Commission ruling, saying he did not believe a predicted boost to employment would eventuate.
“I don’t think this will extend the hours of trading at all for small businesses, what it will do is extend the profit of those small businesses at the detriment of their employees,” he said.
“That means they will have to work more hours just to get the money that they were getting with their previous hours.”
Mr Stradbrook said not only would the decision do nothing to reduce unemployment rates, there would be many underemployed workers in Bendigo and surrounds who would be “seriously disadvantaged” by the move.
“Some of these people work Saturday and Sunday and that’s their only income because they can’t get work during the week and this is just going to make it even more miserable for them to try and exist,” he said.
“A lot of them will be placed in positions where they have to do very awkward hours for less money and can never really enjoy what we take for granted as a home life because of the irregularity of the hours and the low pay they receive.”
Trades Hall secretary Luke Martin said while the commission’s decision did not come as a surprise “the enormity of it is still a shock” and urged workers in all local industries to take a stand against the cuts.
“It might make it more important now for people to be negotiating their agreements more than ever to make sure they can keep these penalty rates the way they are, we don’t have to necessarily follow what the Fair Work Commission tells us,” he said.
“It’s time now for everybody to stand in unity and fight this at the grass roots level.
“It’s quite clear that we currently have a government that’s not going to stand up for the people so we need to do it ourselves.”
Meanwhile the state Labor government also voiced its opposition to the ruling, with Industrial Relations Minister Natalie Hutchins saying the decision would affect award-reliant, low paid workers, including young workers and women who make up more than half the workforce in these sectors.
Ms Hutchins said many affected workers would struggle to make ends meet under the changes.
“Working on nights and weekends can have a detrimental impact on health, family and personal relationships and [workers] should be fairly compensated for this through the payment of penalty rates,” she said.
“Malcolm Turnbull needs to decide if he will stand up for workers or not.”
UPDATE 1.20pm: Federal Member for Bendigo Lisa Chesters said the cut to penalty rates would have a “ripple effect on the local economy”.
“The cuts were much higher than I was expecting,” she said.
“These penalty rates were how households were surviving.
“It’s a cut to the minimum pay and entitlements for our lowest paid workers.”
Ms Chesters said the Labor party was “looking into” how it could challenge the Fair Work Commission ruling on a parliamentary level.
Less take-home pay for casual workers like students could effect their continued education, Ms Chesters said.
“There is no evidence cutting penalty rates would mean an increase in jobs,” she said.
“It’s the biggest wage cut we’ve seen in a very long time.”
UPDATE 12pm: The Bendigo Business Council has welcomed a Fair Work Commission ruling cutting retail workers’ Sunday penalty rates from 200 per cent to 150 per cent of the weekday rate as good for small business in the city.
BBC chief executive officer Leah Sertori said the move would “absolutely” have a positive impact on employment in Bendigo.
Ms Sertori said a survey of BBC members showed the majority supported the change, as recommended by the Productivity Commission in 2015.
“Their view was that business’ first responsibility to the community is to operate ethically and sustainably and the 200 per cent Sunday rate meant operating on a Sunday came at a significant cost to their business and they were making a loss if they opened that day,” she said.
“The view they took was that if they could trade on a Sunday and pay 150 per cent of the normal weekday rate that would make a difference and they would be in a position to open, and the view from those members was that it was better that they could offer people employment on a Sunday at 150 per cent of the rate than not at all.”
But Ms Sertori said not all BBC members were in favour of reducing Sunday rates, with 40 per cent expressing their opposition to the plan.
“The were coming from a different philosophical perspective about Sunday still being culturally a day of rest and a day for being with family so their view was that 200 per cent of the weekday rate was reasonable,” she said.
“I don’t think there’s one universal view of this from business, it’s as complex for our members as it is in the broader community.”
Bendigo trader Robyn Agnoletto, who owns fitness retailers Folly and Jane and Sportsco, said she would now be able to open her doors on Sundays and offer staff more hours.
“Both our stores will definitely be looking at doing Sunday trading now,” she said.
“Before it just wasn’t viable to open, to actually have to employ somebody, whereas now it’s the same rate as a Saturday so I think it works out good for both sides because we can employ some casuals to work on Sunday whereas before we couldn’t have offered that.”
Ms Agnoletto said the decision would help level the playing field between small businesses and national retailers like supermarkets and department stores.
“It’s impossible for small traders to compete with the shopping centres basically, with the national companies,” she said.
“They’re paying a lot less for their stock than what we are, put it that way, people don’t often think of that side of it.”
Speaking from the sidelines of a delegation representing Bendigo’s interests in China, Ms Sertori said the decision should form part of a broader conversation about the role of local businesses in improving the prosperity of the region as a whole.
“Australia is sending so many commodities to Asia without adding any value to them, like for example minerals, coal, iron ore, and from our region, agricultural products where we have so much opportunity to add value to those commodities through manufacturing and food processing to better meet demand in Asia,” she said.
“Those are the sort of things that build wealth in national and in regional economies and when we build the wealth of regional communities small business prospers and can afford to pay people higher wages, so I think it’s all connected.
“What we aught to be aiming for in Bendigo is full employment and full employment at a rate where people can have a high standard of living, so whether that’s a higher casual rate or a sustainable full-time or permanent part-time rate, the goal is for everyone to be able to enjoy the standard of living that they deserve and I think that is a shared goal between business owners and workers, it’s just how we get there where there’s a difference of opinion.”
EARLIER: Hundreds of thousands of Australians who work on Sundays will have their take-home pay slashed after a landmark ruling by the national workplace umpire.
The Fair Work Commission on Thursday morning announced Sunday penalty rates paid in retail, fast food, hospitality and pharmacy industries will be reduced from the existing levels, which, in some cases, are as much as "double time".
Full-time and part-time workers in retail will have their Sunday penalty rates dropped from 200 per cent to 150 per cent of their standard hourly rate, while casuals will go from 200 per cent to 175 per cent.
Hospitality employees will face a reduction in Sunday pay from 175 per cent to 150 per cent, while casual hospitality workers' pay will remain unchanged.
Fast-food employees' Sunday rates will go from 150 per cent to 125 per cent for full-time and part-time staff, and casuals will go from 200 per cent to 175 per cent.
The pay cuts take effect from July.
The controversial decision has angered Australia's union movement, which has invested heavily in a massive campaign to safeguard weekend penalty rates across the country.
'Bad day for working Australians'
"This is a bad day for working Australians," said Australian Council of Trade Unions president Ged Kearney. Struggling workers "won't be able to survive on a 25 or 30 per cent pay cut".
"We are on the way to seeing a whole class of working poor in this country," she said. "We are talking about people who do not earn a fortune. The retail industry made a very healthy operating profit last year. They can afford to pay people decently."
Ms Kearney said the cuts to penalty rates "have to be stopped" and urged all political parties to "step up and say they will protect workers' take home pay today".
She said more than a million workers will face a pay cut of more than 20 per cent, or $6000 per year.
"Imagine what that means to someone when they have to pay car registration, they have to pay rent, when they are trying like crazy to get a mortgage" she said.
Jo-anne Schofield, the national secretary for the union representing hospitality workers, said Prime Minister Malcolm Turnbull could have intervened to prevent cuts to the country's lowest paid workers.
"Let's be clear that this has happened because the big business lobby has made an application to cut the pay of the lowest paid workers in the country. It didn't happen by accident," she said.
Dr Stephen Clibborn from the University of Sydney business school said underpayment of wages and penalty rates is prevalent in retail and hospitality jobs.
"Without effective enforcement of award pay and conditions, today's decision must be viewed to some extent in a bubble, separate from the reality of our labour market," he said.
Adjusting to the 24/7 economy
In the lead-up to the decision, union leaders have argued that Sunday loadings of up to 200 per cent were crucial compensation for low-paid employees who sacrifice weekends and work unsociable hours.
Employer groups have been pushing for years for a reduction to penalty rates on Sundays, which they say are too high, no longer reflect community standards and are forcing businesses to close their doors on weekends and public holidays.
They claim a higher wage for Sunday staff is no longer justified in a 24/7 economy, where workers see no difference in working Sundays compared to Saturdays.
Handing down the decision on Thursday morning, Fair Work Commission president Iain Ross said the existing weekend and public holiday penalty rates did "not achieve the modern awards objective, as they do not provide a fair and relevant minimum safety net".
He said the Fair Work Commission had decided against employers' requests to drop Sunday rates to the same level as Saturdays though as working on Sundays still meant a higher level of inconvenience for employees compared to Saturdays, even if it wasn't as bad as in the past.
The umpire has spent almost two years weighing evidence from more than 140 witnesses and 6000 written submissions.
The Australian Industry Group welcomed the decision as better aligning penalty rates in the fast food industry to the needs of 21st century workplaces.
Its chief executive Innes Willox said a high proportion of employees in the fast food industry were young people who had study commitments during normal business hours.
"The Commission accepted AI Group's evidence that young people often prefer to work in the evenings and on weekends, and that many prefer to work on Sundays rather than Saturdays," he said.
"In the fast food industry, weekends and evenings are peak times. The Commission has recognised that existing Sunday penalty rates in the fast food industry are not fair for employers and no longer relevant."
' Body blow to hundreds of thousands'
Pressure for a reduction to penalty rates had increased since Australia's Productivity Commission in 2015 recommended cutting Sunday rates in line with Saturdays.
Although Mr Turnbull has previously referred to Sunday penalty rates as an outdated concept, the federal government has left reform on the issue to the independent umpire, the Fair Work Commission.
Labor leader Bill Shorten said the decision was what the Coalition had wanted for years.
"Turnbull and his MPs have been pushing to cut penalty rates for years - and now it's happened," he tweeted.
Earlier this week, he has flagged his party would "never support a decision that sees workers worse off".
"With wages growth at record lows and underemployment at record highs, there could not be a worse time to cut penalty rates," he said then, warning the ruling could set a precedent that could eventually cut weekend penalty rates for other occupations, too, such as nurses or paramedics.
Greens workplace relations spokesman Adam Bandt promised to introduce legislation to protect penalty rates for retail, fast food, hospital and pharmacy workers.
"This is a body blow to the hundreds of thousands of people who depend on penalty rates to make ends meet," he said.
'Penalty on jobs'
Conservative Liberal backbencher Eric Abetz said the decision was a welcome step.
"The Fair Work Commission has clearly been mugged by the realities that their previous determination has cost jobs and investment in the hospitality, retail and tourism sectors," he said in a statement.
"Today's decision will be of benefit to the tens of thousands of young Australians who want to work on weekends who have increasingly found that businesses haven't been able to afford opening their doors on Sundays."
"It is somewhat disappointing that the Commission has taken more than three years to consider this matter and I will be seeking to establish why it took such an unusual amount of time."
Creating more jobs?
James Pearson, chief executive officer of the Australian Chamber of Commerce and Industry, argued along the same lines, saying penalty rates had to be cut to make it easier for employers to take on new staff at a time when 725,000 people were out of work, including 259,000 young people.
"Reducing penalty rates for businesses in retail and hospitality will give them greater capacity to open their doors longer, take on more staff and give them more hours. The Restaurant and Catering Association found it could create 40,000 jobs," he said.
However, some employers in the hospitality industry who gave evidence at the Fair Work Commission hearings admitted it was unlikely they would put on more staff if penalty rates were reduced.
Citigroup late last year conducted financial analysis which found big retailers including Myer and JB Hi-Fi were likely to deliver any savings from penalty rate cuts to shareholders.
Former ACTU assistant secretary Tim Lyons, who is a research fellow at the think tank Per Capita, said the Citigroup report revealed that reductions in penalty rates would not save or create more jobs.
He said a lack of dollars in workers pockets was the problem, not a solution to housing affordability, sub-trend economic growth and tax revenue shortfalls.
"This is a very poor decision where the unrelenting attacks on penalty rates and the commission from government and employer groups seems to have played a role," he said.
"In reality, there is no evidence that this will result in more jobs or more hours for existing workers. It's just a pay cut for people that can't afford it."
With reporting by Tom McIlroy