According to ABC News (2010), thousands of Australians working on Sundays and public holidays will experience a pay cut after the government workplace authorities announced the motives behind the rationale. According to the Fair Work Commission asserts that the penalty rate will affect the retail portfolio business in line of fast foods, pharmacy, and hospitality industries. Apparently the Fair Work Commission believes that the current interest rate levels on the consumption portfolio are as much as double the normal rates. Conventionally, the government proposes that the causal workers will have to bear a 200% to 175% penalty rate reduction; while the full-time and part-time fast foods employees will experience a 200% to 150% penalty rate reduction. According to the Fair Work Commission, high penalty rates hinder the growing entrepreneurial business from working on weekends and public holidays. Reducing the penalty rates will create more employment opportunities to the unemployed, who suffer due to closed businesses on weekends for the fear of penalty rates (The Conversation 2017).
According to previous empirical research, many businesses opt to close on Sundays and holidays due to high prohibitory interest rates. Most of the fast foods firms entirely depend on the skeleton staff, which the small scale business cannot afford to pay them in Australian. Ultimately, cutting off the penalty rates will encourage employers to absorb more workers as well as encourage business diversification; hence creating employment opportunities. In fact, the penalty rates reduction will encourage the retailers and hospitality employers to increase the staff number as well as increase more working hours for the enhancement of the 24/7 Australian economy.
On the contrary, the workers and some scholars argue that the penalty rate deduction will stir more economic complexities. According to ABC News (2017), the pay cut occurs to the group that cannot afford to survive the suppressed economy. In fact, former ACTU Assistant Secretary Tim Lyons asserts that the move will not create jobs rather it will be the right time for the employers to pocket the slashed rates. There seems to lack evidence that penalty reduction will increase or create jobs. The Conversation (2017) posits that statistically, most of the Australian casual. Part-time, and fulltime retailer and hospitality worker are the bread winners in the family. Enforcing the penalty rate cut to such individuals will be unfair, malicious, and economically oppressing. According to the majority of the Australian, Sydney workers, the Sunday and holiday earnings remains their pivotal family survival income.
Personally, I don’t support the move to slash the penalty rates. Logically, there is no direct correlation of penalty rate cut to creation of jobs. In fact, it is very probable that even after slashing the penalty rates the employers will pocket the extra coin of the advantage, rather than taking the speculated decision to invest and hire more workers. In fact, the Australian government ought to hike the penalty rates; causal, full-time, and part-time workers are still overworked and significantly underpaid. According to ABC News (2017), the workers are very unlikely to receive further additional workers to supplement the reduced pay. In addition, the majority of the affected sectors are the females; a rule if implemented could widen the economic gender gap.
Furthermore, the employers pay peanuts and offer poor working conditions to the employees. Categorically, it is malicious, greedy, and inconsiderate to cut off the pay while the working hours, working conditions and the terms of payments remain untouched. Pay cut from the slashed penalty rates should be accompanied by new workplace terms, new and slashed working hours, and revised employment terms (The Conversation 2017). In fact, passing the law will be an intimidation to most of the workers who rely on commissions and extra hours on Sundays and holidays to cater for the families.
The Conversation, 2017, Explainer: where to from here on penalty rates? Accessed >
ABC News, 2017, Sunday and public holiday penalty rates will be reduced for hospitality, retail workers, Fair Work Commission rules, Accessed>