Modernised awards a 'disaster and catastrophe': business


Modernised awards a 'disaster and catastrophe': business

Employer groups, which have for decades demanded a rationalisation of Australia’s complex industrial award system, have reacted with outrage at the draft examples of modernised awards released by the AIRC, which they say will add to costs.


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Employer groups, which have for decades demanded a rationalisation of Australia’s complex industrial award system, have reacted with outrage at the draft examples of modernised awards released by the AIRC, which they say will add to costs.

Terms such as ‘disaster’, ‘devastate’ and ‘catastrophe’ have been used as business unites in condemnation of the drafts.

And the Australian Chamber of Commerce and Industry (ACCI) is convening a meeting of Australia’s chambers of commerce and industry associations for 25 September to ‘gauge further reaction once specific industries examine these draft awards in more detail’.

'Many squeezed into one'

Some groups have expressed concern that the process has resulted in many old awards being squeezed into a small number of modern ones – which industry bodies demanded as the precise outcome of the award modernisation process.

Employer groups are particularly incensed by the plan to extend a modified redundancy scheme to small employers.

Retailers are furious that the AIRC has not granted them the penalty rate structures within a seven day, 24 hour working week they sought, nor the 12 month roster they wanted.

Added costs for employers

They all say there will be added costs to business, pointing out that IR Minister Julia Gillard promised this would not happen. In fact her direction to the AIRC on the award modernisation process was that it should not ‘disadvantage employees nor add costs to business’. 

ACCI said the Government’s process of creating new industrial awards to regulate workplace matters ‘risks losing the confidence of the business community if labour cost increases and added regulation contained in drafts released today, are reflected in final outcomes’.

ACCI’s concerns arising from the draft awards include

  • Imposing compulsory redundancy pay on small business, despite government policy to exempt businesses of less than 15 employees;

  • Dual regulation of employment conditions in areas where government is already intending to legislate on the same topic;

  • Re-imposing rules that used to be in awards but which were removed in the 1990s (such as mandatory employee and union consultation on workplace change); and

  • Increasing costs of employment by merging different provisions between awards in different states and amalgamating different awards into smaller numbers.

The Hotel Motel and Accommodation Association (HMAA) is furious about the content of the draft awards, which they say  will cover all businesses and employees in Australia’s accommodation industry (including hotels, motels, resorts and many others), pubs, taverns, cafes and restaurants (and potentially also licensed clubs) from 2010.

'Cost thousands of jobs'

Peter Olah, HMAA’s national affairs manager, said the new awards will ‘devastate hundreds of small businesses and cost many thousands of jobs’ if they are brought in.

‘Instead of delivering four separate awards – one each for accommodation, pubs, restaurants and clubs – the Commissioners crunched over 80 awards into one, regardless of cost or industry impact,’ he said.

‘The reality is that the staff costs of most hotels, motels, resorts, serviced apartments and other accommodation businesses - already the single biggest cost for these businesses - will be forced up dramatically under this monolithic single award.

‘At the same time, the award will also impose new and inflexible conditions on these 24/7 accommodation businesses.

‘The Federal Government’s promise that no employee and no employer will be worse off under their new workplace relations system has been torn to shreds by this dreadful decision.’

Catastrophic for retailing

The National Retailers Association said the new draft award for retailing was ‘catastrophic”.

‘Preliminary estimates are that the new award will result in increases in labour costs of between 5 and 15% for mainstream retailers and up to 25% for take away food operators,’ said the NRA’s executive director Gary Black

‘Employers will have no option but to pass these increased costs on to consumers, or will be forced to reduce staff levels. In the current economic climate, the impact of this on inflation and unemployment levels could be catastrophic.’

Not flexible enough

The Australian Retailers Association (ARA) said its call for a seven day/24 hour trade period had been ignored and the penalty rate structure in the draft award was reminiscent of the 1960s regulated market of Monday to Friday working weeks, which was not flexible enough for modern markets.

‘The modern consumer wants seven day trade, and in some cases, 24 hour shopping access,’ said ARA director Richard Evans.

‘Penalty rates such as overtime and loadings should take effect after prescribed working hours and not prescribed days.

‘Why should someone flipping burgers on a Sunday get paid more than someone doing the same job on a Monday?’

Workers may be worse off

The ACTU was relatively restrained in its response to the draft awards, saying they were concerned that workers may be worse off in some areas.

‘It is particularly welcome that the draft awards restore redundancy pay for the vast bulk of Australians employed in small businesses,’ said ACTU secretary Jeff Lawrence.

‘The commission has also recognised that employee consultation is a part of the modern workplace.

Positive signs — settling disputes

‘The proposed awards would also provide an effective mechanism for the settlement of workplace disputes by an independent umpire. These are all positive signs. 

‘However, we do note that the drafts do, in certain areas, result in a reduction of conditions.

‘We will examine the drafts in detail to make sure that in the final awards these deficiencies are rectified and employees are not disadvantaged.’


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