19 Aug 2014
Words Carla Cook

Paying the penalty

News the Federal Government’s forthcoming Productivity Commission review of the Fair Work Act will broach the subject of penalty rates was music to business operators’ ears. But is it enough?

It was a major wake-up call when a pre-Easter poll by Tourism Accommodation Australia (TAA) found 67 per cent of hoteliers surveyed intended to close outlets or reduce services over the prime holiday period because of penalty rates.

The capacity for the hospitality and tourism industries to employ Australians is being severely hampered by the inflexibility of current work conditions, TAA said.

“Industrial regulations and inflexible working conditions are preventing hotels and tourism businesses from offering services at times that customers expect,” said TAA managing director Rodger Power. “What people don’t understanding is that this is a common view shared by most employers and employees.

“We are not about seeking to reduce wages. We want to see an increase in flexibility of working conditions so that both employers and employees can benefit.”

Time and time again, Resort Brokers Australia hears feedback from operators saying, in many cases, penalty rates actually penalise the very people they are meant to benefit. Businesses shut because the additional costs outweigh any revenue they can earn.

TAA will be making a submission to the Productivity Commission seeking to demonstrate that greater flexibility of labour conditions will benefit both businesses and workers.

“Rather than protecting workers’ rights, penalty rates are impeding opportunities for greater employment,” Mr Powell said. “Penalty rates make it very hard for many businesses to employ staff on weekends and over holiday periods, but this is when casuals and part-timers most want to work, and when customers most need to be served.

“Australia’s competitiveness and professionalism in the eyes of the international tourism industry are suffering as a result.

“Regional and resort areas are very seasonal operations characterised by short periods of peak business and longer periods of fairly slow business, so employment and work conditions need to better reflect the trading cycle of these businesses and their customers.”

Unions naturally fear the review, describing it as an attack on hospitality workers and ‘the Australian way of life’. Understandably, they argue workers should be fairly compensated for working when other people are not. They also contend the industry would find it difficult to attract and retain staff if penalty rates were modified or abolished.

Sharron Caddie, assistant national secretary of United Voice, the union that represents hospitality workers, was recently quoted as saying “without weekend, night and public holiday rates, there would be a massive exodus of workers from the (accommodation) industry. They would not be able to get workers to do this work.”