Penalty rates and the right to rest and play

“If you don’t want to work on a weekend, fair enough, don’t work on a weekend. But if you do want to work on a weekend, and lots of people, particularly students, particularly young people, want to work on a weekend, you want the places to be open to provide jobs.”

– Tony Abbott, January 2015

Penalty rates are under sustained attack. The Business Council of Australia, representing some of the country’s biggest companies, has been issuing increasingly shrill demands for the rates to be cut or abolished.

Last year Fair Work Australia knocked 25 percent off the Sunday penalty rates of hundreds of thousands of hospitality workers. Right now, at the federal government’s instruction, the Productivity Commission is considering their removal from industrial awards, allowing bosses to set their own rates if they pay them at all.

The government and much of the media have presented the payment of penalty rates as a marginal issue, relevant mostly to students and young people working the odd weekend shift. This is an ambitious mischaracterisation of reality. The deregulation of penalty rates would directly impact the income of millions of workers and have far-reaching effects on the wage structure and working hours of the entire working class.

Stripping penalty rates from awards would immediately affect 1.5 million workers whose wages and conditions are set by these minimum standards. Workers on awards are concentrated in industries in which weekend and shift work are common – retail, hospitality, health care, social support and manufacturing. The Australian Council of Trade Unions estimates that workers in service industries like shop assistants, cleaners and hairdressers would be $50 to $90 a week worse off without penalty rates.

In a 2014 survey about unsociable hours and penalty rates, researchers at the University of South Australia’s Centre for Work and Life found that 67 percent of surveyed machine operators received penalty rates. More than half of this number described a reliance on these rates to meet household expenses.

The provision for penalty rates is also a feature of more than three quarters of workplace collective agreements. The changes to the award system currently under consideration would not directly alter the rates paid to the 3 million workers covered by these agreements; however, any drop in the standard set by the award system lowers the bar for workplace bargaining. Unions and workers would be under considerable pressure to “trade off” penalty rates in future rounds of enterprise bargaining.

The Australian Nursing and Midwifery Federation has calculated that its members would lose up to 25 percent of their wages were they to give up penalty rates. Discussing the issue in an online forum, one nurse explains how workers will be forced to work more for less if penalty rates are cut:

“I really needed a job to help support the family so took any shift, but now as I look back over 28 years, I lost friends, relationships, because I worked unsocial hours. Was it worth it? No.” As for the suggestion that night shift nurses simply refuse to work unsociable hours if the rates are cut: “That will not happen; you need the job”, she said.

Since they were first federally legislated in 1919 – following a massive strike wave – penalty rates have provided the legal underpinning to the expectation that workers can enjoy a common time off work, a time in which to participate in joint social, cultural and political activities.

The weakening of trade unions and workplace activism over recent decades has significantly eroded this culture. Deregulation of penalty rates will further legitimise the expansion of “normal” business hours, allowing employers to rob workers of more wages and time.