Businesses confirm they would hire if penalty rates cut

Tuesday 7 March, 2017

The Chamber of Commerce and Industry Queensland (CCIQ), in collaboration with other industry associations, surveyed more than 1000 small businesses to assess the impact of the Fair Work laws, including penalty rates provisions.

The survey, conducted between 11 February and 13 March 2015, delivered an overwhelming response: small businesses confirmed they would open longer, hire more staff and give extra hours to existing staff if penalty rates were cut.

To further inform CCIQ’s feedback to the Productivity Commission’s draft recommendations for workplace relations reform, we undertook an additional survey of 400 small businesses in order to specifically canvass the impact of penalty rates on their business operations.

With respect to the survey results, the penalty rates under the Fair Work laws continues to adversely impact Queensland businesses, especially those in the retail sector.

A significant proportion of businesses in the retail sector (58 per cent) indicated that penalty rates are a major to critical cause for concern at the present time. This compares to less than half for all other sectors, highlighting the undue burden the penalty rates regime places on small businesses in the retail industry.

Findings showed that businesses would open for longer, increase overall employment hours and employ more staff.

Qualitative data from the survey shows business sentiment from across the state in respect to penalty rates. Quotes from our surveys have been provided below.

Specifically, the results showed the majority of small businesses operating in the retail industry (74 per cent) reduced both operating hours and employment hours as a result of penalty rates.

Within the hospitality, entertainment, retail, restaurants and café industries, 27 per cent of businesses did not open on Sundays. When asked if the decision to open on Sundays was due to the level of penalty rates, the response was a resounding yes (71 per cent).

A substantial majority (80 per cent) of businesses emphatically told CCIQ they would expand their operating hours and open on a Sunday – if Sunday penalty rates were equivalent with Saturday.

The survey also found that for businesses that already opened on Sundays, 49 per cent would hire additional employees if Sunday penalty rates were reduced to Saturday rates.

These results and comments came before last month’s decision by the Fair Work Commission to make significance changes to penalty rates for Sunday – a move described by CCIQ and small business as sensible and balanced.

Small business responses to the 2015 survey:

Sunday penalty rates mean we do not operate our full choice of tours or operate our café as it is far too expensive for us to sustain the wage levels. We will be closing our business on Sundays if the rates persist. (Tourism operator, Western Queensland)

We currently operate on absolutely skeleton staff on a Sunday which leads to customer complaints, but we cannot add any staff as we would lose money. The Saturday rate would allow us to staff to the correct levels. (Accommodation, café and restaurants, South Brisbane)

We would like to see penalty rates decrease. We are unable to increase prices due to the economy, however wages and super keep increasing. Our profit margin has narrowed significantly to the point where there is very little profit, and we feel we are just staying open to keep our employees in a job. (Winery, Gold Coast)

We work in a 24/7 environment and penalty rates and high minimum wages mean we have to put our customer rates up every year, fuelling inflation and making it an unfair advantage for other operators. Wage restraint needs to be considered. I cannot employ more staff if wages go up any more. Wages up, employment down - simple. (Tourism operator, Port Douglas)

If the public want retail open seven days for their convenience, we as employers should be able to have the same pay structure over the seven days as we can’t charge more on weekends or public holidays. Competition is driving retail, but it is not driving wages. (Retail business, Sunshine Coast)

The notion of Saturday and Sunday for some businesses is not relevant for those who operate seven days. Penalty rates should apply for hours outside normal daily hours and days in the working week, but not just because they are Saturday and Sunday. Current legislation is stifling business growth and making this country more uncompetitive. (Economic development organisation, Cairns)

I would like to see penalty rates apply where an employee is required to work more than 38 hours on a seven day roster, not just because hours happen to fall on a weekend or holiday. Tourism is a seven days per week operation and businesses shouldn't be penalised for providing weekend services. (Accommodation, café and restaurants, Caloundra)

Weekend work is ideal for university students as well as many others. Penalty rates to work at a time that is ideal for many people is now decreasing their ability to find employment as many businesses close on weekends to avoid penalty rates. This means there are less jobs available, less appointments available for Monday-Friday workers and decreases the productivity of the whole industry on what was once the most profitable day of the week. This system is behind the times and is inflexible for many industries particularly the health sector and cafe industry. It has just eroded the availability of jobs, businesses to prosper and the public to receive services they are desperate for. (Health care sector, Brisbane)

We now live in a seven-day economy. Penalty rates are archaic. Costs are passed on to the consumer and minimises employment opportunities for willing workers like students. Australia competes globally in most industries, but our high cost of labour blunts our competitiveness. (Accommodation, café and restaurants, Cairns)

We need to change the Fair Work’s definition of “ordinary hours”. Certain industry’s "ordinary hours" have changed over the last two decades. Restaurants, cafes and hospitality is a seven days a week business and the industry should not be penalised for providing work to staff, particularly when the majority of the population expect that they should be open.(Accommodation, café and restaurants, Gold Coast)

Small business in the tourism sector cannot financially bear the penalty rates and public holiday rates. To remain open seven days per week all year round, we need the ability to roster staff at the same rates no matter which days they work. It is an absolute requirement that business in this sector do operate on the weekends and public holidays when we have tourists and locals who wish to frequent the tours, cafes and restaurants especially on these days. Presently many small businesses cannot afford to stay open over weekends and many tour companies cannot afford to only operate on week days. This is not acceptable especially for international visitors to Australia. (Accommodation, café and restaurants, Daintree)

We are no longer a five day a week society and this needs to be reflected in the penalty rates. Penalty rates should be in place for overtime but some workers choose to work weekends or nights, so it makes little sense that business are penalised for giving the employee their preferred hours of work. With wages going so high, it is no wonder businesses are turning to self-serve stations to ensure wages are kept low, but this just means decreasing employment opportunities. (Accommodation, café and restaurants, Gladstone)

The standard Monday to Friday consumer week no longer applies, penalty rates are excessive and other running costs of a business are ever increasing. All of these costs are being passed onto the consumer through higher prices. Given consumers can obtain goods cheaply and easily on the internet, penalty rates are driving more people to seek products or services elsewhere.(Accommodation, Townsville)

Penalty Rates for Sundays are ridiculous and unsustainable. We have cut our opening hours on Sundays and may end up closing altogether on Sundays. Our staff want to work weekends as that’s the only time school and university students are available, but we simply cannot afford to pay double time on a Sunday. We are losing our business to large chains that pay less in wages for junior staff on weekends. (Retail, Toowoomba)

We want to see a reduction in penalty rates. We agree they should be there, but the rate is too high for an unskilled workforce. (Accommodation, café and restaurants, Logan)

For tourism and hospitality businesses, the penalty rates make turning a profit impossible, yet it is not good business to not operate services on those days. Tourism is expected to operate 24/7 and while employees and suppliers have a great day, the employer has to take on all responsibility for customer and staff welfare, and is most likely running at a loss. (Tourism operator, Port Douglas)

Obligatory conditions relating to penalty rates and workplace agreements should not be applicable to small and medium businesses. Wages are already high and penalty rates in our industry of manufacturing makes us uncompetitive, both for exports and the local market.(Manufacturing, Brisbane)

We live in a 24 hours a day, seven days a week society, and hospitality industry penalty rates are hurting the industry and in turn hurting the lifestyles of Australians. More people would be employed on weekends if penalty rates were reduced or abolished. (Accommodation, café and restaurants, Brisbane)

We live in a 24/7 society, individual small businesses should have employment flexibility regarding penalty rates for weekends and public holidays. Flexibility should be restricted to businesses with less than 50 employees to ensure they can compete on a more level field with the large multinationals. (Aviation, Far North Queensland)

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