The Federal Government's decision to introduce legislation that effectively forbids businesses and their employees from negotiating the incorporation of penalty rates into base salary further reflects that Australia's industrial relations is not fit for purpose and incapable of lifting labour productivity, Australian Retailers Association (ARA) said today.
ARA CEO Chris Rodwell said the 'salary absorption' model proposed as part of the ARA's application to vary the General Retail Industry Award (GRIA) has been focused on giving the choice to retail managers to opt into an annualised salary to provide greater income and financial stability. It provided for a 35% increase to base salary.
"This application is absolutely consistent with the government's stated intent when it initiated the FWC's independent review of Awards," he said. "Contrary to misinformed claims, it never sought to remove penalty rates from the award. It simply provided a commonsense option to absorb them to provide a higher base salary and improved job security," he said.
"Former Minister Tony Burke directed back in September 2023 that he wanted the modern award review to ensure the system was "easy to understand and use, stable and sustainable" and to also improve opportunities for stable and secure work. Our application has been entirely faithful with this thinking.
"That the Federal Government has decided to intervene in the Fair Work Commission's independent determination around penalty rate arrangements is troubling. It's also overlooks that salary arrangements like this exist in most industries - in fact, the ARA proposal has more safeguards.
"The retail sector employs around 1.4 million Australians or 10% of the workforce. The GRIA underpins the employment of many of these people, but it fails on so many levels, not least in providing workplace flexibility and job security. It is profoundly complex and confusing, running to 96 pages and including 994 different pay rates. Australia's largest retailers find it difficult to navigate. Our smallest retailers find it near impossible to interpret. Importantly, it fails employers and employees alike.
"The decision also runs contrary to the government's stated ambitions to lift productivity in this term of government, dampening expectations and putting the conversation on labour productivity in reverse. That's a serious problem given Australia's industrial relations environment fundamentally fails to support business investment and entrepreneurship. Improvements in living standards will be elusive if we don't face into this problem.
"While enterprise bargaining may align with union objectives of expanding membership, it is not an easy or preferred vehicle for achieving productive and flexible workplace arrangements for small businesses. Instead, it imposes additional costs, complexity and administrative pressures, further straining employers already navigating significant challenges in today's economic climate," said Mr Rodwell.
