Penalty rates slashed!

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Penalty rates on Sundays and public holidays are set to be slashed in a decision by the mis-named “Fair Work Commission”. Workers in fast food, retail, hospitality and pharmacies, often living week to week, face wage cuts up to thousands of dollars a year.

The commission’s president Iain Ross freely admitted that many affected workers “earn just enough to cover weekly expenses”, and the decision would “inevitably cause some hardship”. A representative of retail bosses, Russell Zimmerman, said he was “very happy”.

Bosses are constantly striving to squeeze workers’ wages in order to make more profits. This is the essence of capitalism, as employers try to out-compete each other at any cost, they cause chaos, destruction and misery.

This latest round of attacks on penalty rates goes back several years. In 2014 the so-called “Fair Work Commission” (FWC) decided to slash penalty rates for casuals in the restaurant industry. In 2015 the government’s think tank, the “Productivity Commission”, recommended sweeping cuts to weekend penalties. The latest decision will not satisfy the profit-lust of corporate Australia. They will continue their campaign and target other workers.

Permanent retail and pharmacy workers will see award penalty rates on Sundays reduced from 200% to 150%. Casuals will see their Sunday rates go down from 200% to 175%. Permanent hospitality staff will lose out, sliding from 175% to 150%, while casuals, hit 3 years ago, will remain at 150%.

Some fast food workers will suffer cuts of 25%. Permanent fast food workers go down to 125% and casuals go down to 150%. On public holidays the award rates for permanent retail and hospitality staff, excluding clubs, will drop from 250% to 225%. Casuals will stay at 250%.

Bosses argue that penalty rates were a big problem standing in the way of more jobs, more services and businesses being open on Sundays. But a multitude of figures from the Australian Bureau of Statistics over the last decades have shown hospitality is in rude health, with plenty of jobs created and businesses opening.

The real issue from the view of workers is the growth of precarious, insecure work with long hours, low pay and poor conditions. This is in no way helped by slashing wages.

Effectively the bosses are saying that already low paid workers have to sacrifice some of their pay, or their hours, for others to have similarly poor-quality employment. It’s a typical divide and conquer strategy. Moreover, there is nothing that can force capitalists to use the money they save on penalty rates to hire more staff.

Businesses run to maximise profit, not jobs, and if they can make more profit with fewer staff they will. Even from the view of customers, it’s clear for anyone to see that Sunday morning is one of the busiest times at popular cafe and shopping strips, with few if any shops closed. Their logic is bogus.

July 1 is the intended start date of the public holiday wage cuts. The FWC has not set a date yet for the Sunday cuts. Instead they intend to take more time to decide how to implement it and phase it in over a year.

This means that there is still an opportunity to fight and defeat the decision, which is not yet reality but simply ‘a piece of paper’. In addition to defending the wages of low-paid workers who will be seriously worse off, this is a key fight for the broader working class. If the decision is allowed to stick, like the 2014 cut, it will fortify a position that bosses can use to attack others like nurses, paramedics, transport workers and the building trades.

While this decision is a blow, the reality is that many workers in hospitality and retail have already had their penalty rates slashed. And those who work ‘off the books’ have never received them in the first place. At some of Australia’s largest employers, like Woolworths, Sunday penalty rates were long ago ‘negotiated’ away in rotten enterprise agreements that were endorsed by the leaders of Australia’s worst union, the SDA.

Elsewhere wages are being stolen by bosses who ignore rules on penalty rates and illegally underpay their workers. Examples include 7-Eleven and Domino’s Pizza, as well as thousands of cafes, restaurants and shops across the country.

The opposition Labor Party have come out against the decision but this is thoroughly duplicitous. Only last year Bill Shorten said that Labor would accept the decision of the FWC even if the commission opted to reduce them. Now, in a populist turn he pretends to be a champion of penalty rates.

The truth is that it was Shorten himself who amended the laws to require the FWC to review penalty rates in the first place. He did this when he was the Workplace Relations Minister in the previous Labor government. At the same time, as a union leader, Shorten signed off on numerous collective agreements that cut penalty rates. Labor also wants us to forget that they were the ones who appointed Iain Ross to the FWC.

A key part of any campaign to defend our wages and conditions is rejecting Labor’s lies and imbuing the trade union movement with a new fighting approach.

Workers in the affected industries are targeted because they are either unorganised or members of tame cat unions like the SDA. To fight the attacks on penalty rates workers need to get organised and active, for example in the new Retail and Fast Food Workers Union.

A vibrant, militant campaign including protests and industrial action still has the potential to frustrate and defeat these cuts. Trade union members in other industries should support such a campaign in the interests of solidarity, but also because if this is allowed to proceed they will be next in the firing line.

By Kirk Leonard

Sign the “Stop-work action to defend penalty rates!” petition here.