CCIQ urges greater flexibility in penalty rates system

Wednesday 11 November, 2015 | By: Darrell Giles | Tags: Penalty Rates, Fair Work Commission, Fair Work laws;

The Chamber of Commerce and Industry Queensland (CCIQ) has called for greater flexibility on penalty rates in the retail sector.

In its submission to the Fair Work Commission’s four-yearly review of modern awards, CCIQ urged the Commission to take a sensible approach to how penalty rates can be applied to businesses that operate seven days a week or outside ‘standard’ trading hours.

CCIQ Director of Advocacy and Workplace Relations Nick Behrens said penalty rates were the biggest issue affecting retail businesses when it came to industrial relations.

He said CCIQ had surveyed over 1,400 Queensland small businesses in two surveys to assess the impact of the Fair Work laws and penalty rates, including penalty rates provisions.

“A significant proportion of businesses in the retail sector (58 per cent) indicated that penalty rates and public holiday entitlements are a major to critical cause for concern,” Mr Behrens said.

“The survey results confirm that the impact of penalty rates is more acute for businesses in the retail sector, with 47 per cent of retail businesses surveyed stating that penalties had increased or substantially increased as result of the Fair Work Act and Modern Awards.

“Interestingly, only 5 per cent of businesses in the retail sector chose to reduce operating hours in response to penalty rates, instead revealing that as a consequence of the rigidities in the penalty rates regime, businesses are forced into situations to reduce employment hours, impacting on customer service standards and/or scale to cover fixed operating expenses.

“As a result, the majority of small businesses in the retail sector (74 per cent) reduce both operating hours and employment hours as a result of penalty rates.”

“Our representations to the Fair Work Commission conclusively demonstrate that employers are reducing overall employment hours to the direct detriment of existing and potential employees including Queensland youth as a result of the imposition of penalty rates,” Mr Behrens said.

Mr Behrens said that the current system of penalty rates is preventing Queensland retail businesses from tailoring their staffing arrangements to the peak demand periods for their products and services.

“Overall, the survey findings suggest in the strongest possible terms that businesses would hire more staff and open for longer if penalty rates were reduced.

“There is strong desire for reform, but the majority of businesses told us that they support the continued regulation of penalty rates.

“The preferred solution is to reduce penalty rate loadings that will create an incentive for businesses to increase employment hours.

“Ideally, CCIQ would like to see negotiated agreements between employer and employee that allow for greater flexibility in the application of penalty rates, allowing Queensland businesses to generate alternative approaches that involve specific arrangements for each business and tailored to the scope of work under each award.”

Mr Behrens said that a practical approach to penalty rates, which reflects the contemporary 24/7 nature of our economy, would best serve the needs of small business and their employees.

The Fair Work Commission is currently considering penalty rates provisions as they apply to businesses operating in the retail sector as part of a 4 yearly review of modern awards.          

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