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Penalty rates reduction puts the experience back to Sunday

Businesses have welcomed a shift in Sunday penalty rates for workers in retail and hospitality as providing a boost for an increasingly important trad
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Penalty rates reduction puts the experience back to Sunday

Penalty rates reduction puts the experience back to Sunday

24 February 2017

This article was originally featured on

Businesses have welcomed a shift in Sunday penalty rates for workers in retail and hospitality as providing a boost for an increasingly important trading day.

Sunday is the No.1 trading day for many of Fred Harrison's grocery stores across NSW, Victoria and Queensland and now Australia's biggest independent grocer is looking forward to putting some more experienced staff back on the weekend roster.

Until now Sunday has always been the domain of the young, casual staff according to Mr Harrison, but the penalty rate reduction means he can now bring back some of the older, more skilled workers and provide a "higher level of service" on the weekend.

"We welcome any reduction," Mr Harrison said, who is chief executive of Ritchies IGA and runs about 80 outlets on the eastern seaboard.

"I see this as a realigning with the times and it means we can 'man' our stores more efficiently and more effectively.

"We are still going to employ those 15, 16 and 17-year-olds as we always have but this will be a bit of a win for our older casuals."

Former Coles executive Matt Swindells runs the Tasman Market Fresh Meats chain, which trades seven days a week as well as public holidays.

In the past three years Mr Swindells said the popularity of weekend trade has burgeoned as well as demand on public holidays, but he warned retailers needed to act thoughtfully to keep their workforce on-side with the changes.

"If you are not careful your team will see it as gouging," Mr Swindells said.

"I don't think it's just as simple as taking a loading away, you've got to approach it in a more measured way, you've still got to remunerate and incentivise staff properly."

One experienced retailer, who would only talk on the condition of anonymity said the challenge for retailers was to invest the funds they saved back into service, rather than "taking them out as profit".

The changes handed down by the Fair Work Commission will cut Sunday penalty rates from double-time to time-and-a-half and public holiday loadings will drop from double-time-and-a-half to double-time-and-a-quarter.

Citi's head of research Craig Woolford said the biggest beneficiaries of the cuts would be JB Hi-Fi, which operates under the award, as well as Myer and also Coles owner Wesfarmers.

"The reality is retailers will add additional staff on Sunday and may pass some back through lower prices," Mr Woolford said.

"The impact on retailers is varied, some retailers have enterprise agreements with lower than award Sunday rates."

Citi estimates the changes could have an 8 per cent upside for JB Hi-Fi and Myer's earnings per share, but in reality most of Australia's largest retail operations pay their staff through enterprise bargain agreements, including Woolworths, Just Group and Super Retail Group.

These agreements have traded-off some penalty rates in exchange for other provisions such as higher base rates of pay.

The Business Council of Australia described the changes as "common sense" with the potential to create new jobs and boost economic growth

"We support the principle that people working casually, overtime, unusual shifts or unsociable hours should be paid a premium," BCA chief Jennifer Westacott said.

"This decision recognises that the community's view about what constitutes unsociable hours has shifted in the decades since penalty rates were first introduced.

"The onus is now on employers to demonstrate that modest reductions of this kind can mean more hours for workers and better service for customers."

Australian Retailers Association executive director Russell Zimmerman said the Fair Work decision would sustain growth in the retail industry and increase employment rates, but he warned the unions would work hard to appeal it.

"This is definitely not the last we will hear on this matter as the unions have already stated that they will pursue an appeal," Mr Zimmerman said.

"The ARA will be opposing any union appeal, as we are hoping to achieve the July 1 implementation of a number of significant changes."

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