MYOB's exclusive care
sector partner
Penalty Rates

Penalty rates: tips for handling a political hot potato


With the Federal Election looming, Sunday penalty rates are generating heat. Labor thinks they should stay, while the Liberals have mixed opinions on the matter.Both parties’
ultimately handball the issue, saying it’s a matter for the Fair Work Commission
.

There has also been the usual amount of name calling on both sides.

As a manager, mixed signals are the last thing you need. Whatever your views on the policy itself, you just want to know: what does it mean for my business? When a casual employee turns up on Sunday, how much do I have to pay them?

We’ve sifted through the parties’ statements to unearth the most likely policies on Sunday penalty rates, whoever wins power.

Liberal

Liberal MPs are divided. Some want Sunday rates reduced so they’re on par with Saturday rates. According to the ABC, others are less convinced. Coalition MPs are wary after the flak they copped over Work Choices, and unions are threatening even worse if penalty rates are cut.

The Productivity Commission Report takes a much clearer stance. The Commission recommended bringing Sunday rates into line with Saturday rates for these industries:

  • Hospitality
  • Entertainment
  • Retail
  • Restaurants
  • Cafes.

The Commission’s rationale: that Australians’ lifestyles and expectations of service have changed. Working on Sunday is now an inherent part of many hospitality jobs.

Labor

Labor staunchly opposes cutting Sunday penalty rates. Labor’s main argument is that penalty rates underpin casual workers’ financial security.

Up in the air

We’ll know which way the chips will fall in a few weeks. But it could be months or years before we see any change.

It’s tempting to just forget about penalty rates for now. But that could leave your business exposed.

Political risk insurance

Imagine this scenario. The government decides to vary penalty rates. It puts out a media release, but that is soon buried in your EA’s email inbox. Your HR team doesn’t notice, so they don’t update the pay rates in your systems. Without ever intending to, you start underpaying your staff. Slowly the gap widens between what you owe and what you pay. Eventually, one of your staff notices and raises a complaint. Now you’re faced with a hefty backpay bill, and the potential for the Fairwork Ombudsman to get involved.

There is a better way of doing things: Tackle the risk before it starts. Use award management software such as easyEMPLOYER to instantly update your systems the moment an award changes. It’s automated, so there’s no administrative headaches for your team.

And you’re sure you’re covered for years ahead, whichever policy wins the day.