Both sides ‘worse off’ under moves to modern awards

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Both sides ‘worse off’ under moves to modern awards

Business and unions are generally unhappy with yesterday’s AIRC decision on the transition arrangements for the move to modern awards, saying it will cost both employers and employees.

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Business and unions are generally unhappy with yesterday’s AIRC decision on the transition arrangements for the move to modern awards, saying it will cost both employers and employees.
 
The Commission decided that any gains or losses would be phased in over five 12-month periods, starting from 1 July 2010.
 
Employers will be able to absorb any increases into overaward payments, while employees have been guaranteed their take-home pay will not be cut. However, over time some employers will be paying more, and some employees will have lower wages than they otherwise would have had.
 
Scurrilous’ campaign: ACTU
 
ACTU secretary Jeff Lawrence accused some employer groups of running a ‘scurrilous’ campaign to overstate the impact of the award changes. He said unions were disappointed that thousands of low-paid workers would have to endure a five-year transition period before they saw the full benefit of a lift in their award wages and penalty rates.
 
‘Unions are concerned that the transition provisions are limited to wages and some penalty rates will not apply to workers' allowances and other job conditions,’ he said.
 
‘This means that many workers will see cuts to their take-home pay through these award modernisation changes. These reductions in allowances and changes to job conditions will come into effect from January 1, 2010, and result in immediate losses for workers.’
 
Lawrence said the loss for workers from January next year unfairly contrasted with the five-year phase-in for rises in wages and penalty rates that would benefit employers.
 
Govt ‘promised’ no higher costs: NRA
 
The National Retail Association (NRA) is angry that there will be any labour cost increased flowing from modern awards.
 
‘The transitional decision confirming substantial labour cost increases, and the Deputy Prime Minister's refusal to intervene and prevent substantial labour cost increases, makes it clear that employers have been deceived over the award modernisation process,’ said NRA executive director Gary Black.
 
‘When the process was commenced the Commission was given an explicit direction that an increase in employers’ labour costs could not result. The Commission has ignored the direction and the government refuses to act.’
 
‘Sting’ for employers: ACCI
 
Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry (ACCI) said that even with the transitional arrangements announced today, the new national industrial awards will have ‘a considerable sting’ for many employers in industries traditionally covered by state industrial relations systems.
 
‘Recognition by the tribunal that current economic conditions warrant a cautious approach in making new awards, is welcome,’ Anderson said.
 
‘However, the tribunal’s conclusion that ‘cost increases are in prospect’ will disappoint employers who have relied on government assurances that the process was not intended to increase their costs.’
 
Weekend staff cuts: ARA
 
The Australian Retailers Association (ARA) said the decision may see small retailers not opening on Sundays, or cutting staff at weekends.
 
However, it applauded the AIRC decision to make use of the new retail award’s full five-year transition period for increases to penalties and wage rates.
 
Spokeswoman Yvonne Anderson said retailers who would have shed staff to cope with full wage increases from January 2010 were relieved by the decision to phase-in increases to wages, casual and part-time loadings, penalty rates and shift allowances at 20% per year from July 2010.
 
‘The gradual phase-in of wage bill increases under the new retail award will give small retailers time to accommodate the changes and allow them to concentrate on holding onto staff at a time when job security is a vital ingredient in continuing economic recovery,’ she said.
 
‘However, there is still a concern the phase-in of weekend penalty rates may only protect retail jobs for the time being by delaying retailers’ decisions to either close their doors on Sundays or cut back on staff who usually work on weekends.'
 
‘For small retailers the increased wage bills will eventually begin to outweigh the commercial benefits of meeting consumer demand and of employing workers for Sunday trading.'
 
‘This is of particular concern for small retailers in NSW, Qld and ACT where penalty rates for hours worked on Sundays will eventually increase from time and a half to double time under the new award.’
 
Changes ‘sensible’: Ai Group
 
The Australian Industry Group (Ai Group) welcomed the Commission’s decision, but said it would closely monitor its effects.
 
Chief executive Heather Ridout said the provisions adopted by the AIRC were ‘sensible’.
 
‘The Commission has rightly rejected the unions’ proposal to preserve each and every more generous existing award entitlement, which Ai Group strongly opposed as unworkable,’ she said.
 
‘Given the very large number of existing federal and state awards which will be superseded by the modern awards, the effect of the model transitional provisions on employers and employees in each industry will need to be carefully considered. Following this analysis, Ai Group intends to bring any concerns to the attention of the Commission.'
 
‘The Commission’s approach will assist employers and employees in understanding all of the new requirements and will greatly alleviate the financial impacts upon employers and employees.’
 
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