The Penalty Rate Debate

The Attacks

Currently there is a three-pronged attack on your rights at work and your right to compensation for working weekends.

Attack One: Employers

Employers have made applications to cut workers’ rights to penalty rates on the weekend. These are currently before the Fair Work Commission for hearing.

One of those submissions is from the Australian Retail Council (formerly known as ‘ANRA’ and it is the peak employer organisation which represents Australia’s largest retailers) of which Bunnings is a supporter and member. It is important to understand that although specific companies do not openly say they are “for” or “against” penalty rate changes, Companies (like Bunnings) utilise their membership of their ‘unions’ (like the ARC, the Australian Retail Association and the National Retailers Association) to express their opinions.

Attack Two: The Productivity Commission

The draft Productivity Commission Report recommends that Sunday penalty rates should be reduced to the same level as Saturday penalty rates in retail and hospitality. In some cases this would cut the pre-tax earnings of a full time shop assistant working an 8 hour shift on a Sunday by $118 per week. It is worth noting that full time work in retail is decreasing, and these positions are being replaced by Part Time and Casual workers. There is a growing “under-employment” problem as a result. Underemployment means people wanting more hours but are unable to get them. When we consider the proposed cuts to Sunday penalties as a percentage of earnings these employees would suffer even more.

The Australian Retail Council ‘ANRA’

The ANRA’s submission to the Productivity Commission, states that their members’ (including Bunnings) employees (like you) are more than happy to work ‘unsociable hours’. The ANRA define ‘unsociable hours’ as hours after 9pm weekdays and any time on weekends. This internal data directly conflicts with the ‘Australian Work and Life Index’ survey that shows that more than half of workers surveyed would stop working on Sundays if penalty rates were removed. The survey data used by ANRA in their submission is clearly unreliable.

Attack Three: The Parliament

Cross bench senators have introduced a bill before the Parliament, the Fair Work Amendment (Penalty Rates Exemption for Small Businesses) Bill 2015.

This Bill, if adopted, would amend the Fair Work Act 2009 to remove the requirement that certain small businesses pay penalty rates unless the work is performed on a weekend and is in addition to 38 hours of work over a seven day period, is in addition to ten hours of work in a 24 hour period, or is performed on a public holiday.

This has the potential to significantly affect retail workers in small businesses. If applied in small businesses, it will not be long until large retailers argue these arrangements are unfair and anti-competitive and that large retailers should have the same concessions.  Think about it. Most retail are Part Time or Casual workers working less than 38 hours. If this Bill gets passed it will cut the pay of millions of workers in small businesses Australia-wide. And if people’s wages are cut, people have less money to spend, there’ll be less demand for staff, meaning less hours rostered.

What this means for you

Retail employers want to cut your pay through attacking your penalties as we in retail are predominantly an ‘unskilled’ workforce. They argue that the Minimum Wage in Australia is too high.

Retail workers are as human as everyone else. We are charged the same rate in bills, in our rent or mortgage. We pay the same at the petrol bowser and the same rate for groceries as everyone else. These cuts to retail workers’ pay are an attack on the wages of the lowest paid workers in Australia.

The gap is widening

The wage gap (the gap between the Minimum Wage and Average Earnings) is widening and be exacerbated if Penalty Rates are cut or abolished.

Officially, the National Minimum Wage increased by $16 per week on July 1, 2015 to $656.90. This is an increase of 43 cents per hour to $17.29 per hour. This 2.5% increase has also been applied to minimum rates in Modern Awards.

The chart below shows that Minimum Wage is not keeping up. While the April 1997 Minimum Wage was equal to 48.5% of full-time adult male ordinary time “average” earnings, by July 2014this has fallen to 41.1%.

Work Choice is not ‘dead and buried’

The Howard Government introduced changes to Industrial Relations laws called “Work Choices” in 2005. The laws stripped the right for unfair dismissal remedies for employees of employers under a certain size, removed the ‘no disadvantage test’ which sought to ensure workers were not disadvantaged by changes in legislation and heavily restricted workers’ ability to take industrial action (i.e. ‘strike’). The law not only encouraged workers to bargain individually for their working conditions but imposed severe restrictions on trade union activity. The Australian Council of Trade Unions changed the conversation running a “Your Rights at Work” campaign. The campaign attacked these new laws and the Liberal / National Government that introduced them. Labor (under Kevin Rudd) promised to abolish said legislation and won the 2007 election with that mandate. The Rudd government legislated the current day Fair Work Act 2009 in an attempt to largely repair the damage done by Work Choices and the former Coalition Government.

With the election of another Coalition Government in 2013 we are seeing their grubby little hands on your pay and working conditions again. Tony Abbott ordered the Productivity Commission to look at Penalty Rates and the cost to business. One does not order a ‘review’ of something unless you intend to get reduce or abolish them.

Myths Debunked

There are a lot of arguments from special interest holders and the misguided public that says cuts to penalty rates would be good for the economy. Here are the myths debunked:

“But it will create more jobs!”

There is no research to support this theory. If you think about it practically, you will see why.

Wesfarmers reports that Bunnings made $1088 million dollars this year in which was an 11.89% increase from last year. There have been no increases in rostered team member hours because we as workers have already shown we can operate on skeleton rostering. Why would more team members be rostered than are required?

“But I’m protected because my EBA says I’m entitled to Penalty Rates”

The EBA is the Enterprise Bargaining Agreement and the key word here is ‘Bargaining’. This process involves negotiations once every 3-4 years between Bunnings and the SDA regarding such things as pay rises, penalty rates and other working conditions.

Bunnings will have their interests which are often about cutting costs and increasing flexibility in line with business objectives.

The SDA negotiates in the employees’ interests and the minimum wages and conditions under the relevant Modern Award underpin your Enterprise Agreement, which must pass the ‘Better Off Overall’ test compared to that Award. If penalty rates under the Award are cut then we are losing the underpinning conditions used to negotiate our Agreement. If penalty rates are abolished or decreased under the Modern Award you bet that will be the first thing on their agenda. Obviously this is an assumption, but, if you were a business owner and can save money through wages and you are paying over and above the Modern Award, surely you would take the opportunity to make a saving.

What you can do?


Businesses are taking over the debate by submitting reports to governments. This is essentially businesses dictating Government Policy. Should a business tell you what you need and what your rights are as a worker? Does a business represent your needs?

Change the conversation by telling your and other real retail workers’ stories. Talk about what you will lose in penalty rates, talk about the loss of income, talk about the unfairness. It is unfair that you would have to work weekends and miss out on family and social time and would not be adequately compensated.


The SDA is part of the Australian Council of Trade Unions in which consists of 46 affiliated unions. This altogether makes the Australian Council of Trade Unions the largest membership based organisation in Australia (meaning it is bigger than any religion in Australia!). Unions work to look after workers interests. If Union membership levels drop then there are less people on your side. That’s why it is important to be a member and join the fight!

This one, but large, voice is against cuts to Penalty Rates and this can only grow stronger with more members joining their voice.

Jenna Schofield
Proud SDA Union Delegate & proud advocate for your rights at work.


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