Magazine of Socialist Action in Australia

Employers rewarded for breaking laws

Reading Time: 3 minutes

One of the excuses that the Fair Work Commission (FWC) gave for cutting Sunday penalty rates to fast food, hospitality, retail and pharmaceutical workers was that there were already high rates of non-compliance (read: law breaking) in those sectors. In fact, the FWC report revealed a staggeringly high level of law breaking – 67% of employers in those sectors are currently underpaying their workers!

The report asserts that one of the main reasons for this is because employers pay their workers “[flat] (or loaded) rates of pay, in order to simplify their payroll process, but they underestimate the additional premium (or loading) required in order to compensate employees for the loss of penalty rates, resulting in non-compliance.”

The Socialist spoke to Bryce, a delivery driver who has been employed at the same workplace for 12 years. Bryce gets paid $12 per hour cash in hand. When asked about the FWC decision he said: “[my workmates and I] have never been on award rates, and it wasn’t because our boss was confused about what we should be paid, it’s always been a deliberate decision to not pay me and my workmates what they are meant to. The Commission’s decision definitely won’t lead to anyone at my workplace getting their entitled wage. It’s just a further excuse for the boss to pay us shit.”

Bryce’s situation is a typical one. While the vast bulk of workers in fast food, hospitality and retail do not get penalty rates, many more are not even paid the legal minimum wage ($17.70). So called “cash in hand” work is rife. There is no doubt that non-compliance is a major problem, but instead of tackling this problem, and forcing employers to adhere to the law, the FWC have instead rewarded the employers for their bad behaviour.

The Fair Work Commission is an entirely misnamed body. Far from operating to protect workers’ wages and conditions its main focus is to protect the profits of businesses. The decision to slash penalty rates for Sunday work proves this.

Employer organisations have applauded the move saying that they will collectively save $4.25 billion a year. This is $4.25 billion a year that is being stolen from workers – the people that have given up their time on a Sunday to create that wealth by flipping burgers, delivering pizza and making coffees. While some employers claim that they will use the cash to employ extra staff there is nothing compelling them to do that. Most will just pocket it.

While it is only fast food, hospitality, retail and pharmaceutical workers that are affected by the decision, the precedent will eventually be used to drive down the wages and conditions of workers in other sectors. They have started with these particular sectors because they are some of the least represented by the union movement. The workers are seen as an easy target, being mostly young, and often students, migrants and women.

When they move on to cutting the penalty rates of people like nurses, call centre staff or disability workers, they will use the excuse that other Sunday workers have already had their pay cut.

We need to stand opposed to this race to the bottom and stop the cuts to all Sunday penalty rates. Unfortunately, we cannot rely on Labor to stop this rort. It was Bill Shorten who instigated the report that led to the FWC decision in the first place! While he was a union leader he also signed many agreements that saw penalty rates cut.

Workers themselves could force the government to reverse the decision if widespread industrial action was organised. A one-day nationwide stop work could strike a blow to both the employers and the government. The ACTU should organise such an action as the first step in the campaign.

In addition to demanding that penalty rates are protected by law, the unions should campaign for a regime that has real powers to enforce the payment of the minimum wage.

Rather than being rewarded for breaking the law, employers should be held to account. They are stealing wages from workers and their actions should be treated as a crime. If a worker was caught stealing from their boss, they would lose their job and potentially face criminal charges. Yet, when a boss steals from workers, all the FWC does is politely ask them not to do it again!

We need to fight against this system that is so blatantly designed to protect bosses, rather than ordinary people.

By Meredith Jacka


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