SA penalty rates deal won’t lead to changes in Qld pay levels

Gold Coast employment law expert Brett Wilson says a landmark pay deal in South Australia to slash weekend penalty rates for retail workers in favour of higher base wages won’t automatically apply in Queensland.

While the SA agreement between the shop assistants’ union and Business SA is being hailed as a breakthrough in the penalty rates war, Mr Wilson said a deal in SA does not automatically mean changes in other states.

Mr Wilson, of Gold Coast and Sydney employment law firm Adams Wilson Lawyers, said there were unique differences between the weekend penalty rates market in South Australia and areas like the Gold Coast.


“South Australia doesn’t have the size of the tourism market, or the type of tourism that we have on the Gold Coast. The GC has a lot of nightclubs, late night restaurants, theme parks etc. There’s a younger crowd and more demand for late night venues and weird hours. They regard weekends as a day when everything should be open for them and business has to compete for their dollars.

“Therefore in SA a weekend penalty rates deal could be negotiated as there might not be that much overtime from night work and weekends, therefore less to give in exchange for a higher base wage. It’s all in the numbers,” he said.

Mr Wilson expected business and unions throughout Australia would be closely examining the SA deal and there would inevitably be pressure to implement it in other states.

“But all parties need to appreciate that other areas of Australia are unique.

Yes the SA deal could flow on and higher base wages can compensate for lost penalty rates, but SA is different to the Gold Coast and Sydney,” Mr Wilson said.

The South Australia deal will see the end of Saturday penalties and the halving of those paid on Sundays, while retail workers will be offered higher base rates of pay and improved conditions.
These include the right to refuse weekend work on Sundays and public holidays.

Business and Federal Government have welcomed the agreement but Mr Wilson said it seemed to be geared toward SA’s retail industry, while the Gold Coast’s primary penalty rates market was in hospitality.

The South Australian deal reduces retail employee penalty rates for Sundays from a 100 per cent loading to 50 per cent, cuts public holiday rates from 150 per cent to 100 cent, and abolishes penalty rates on Saturdays and weekday evenings.

In return, workers will receive a higher base wage, a guaranteed annual pay rise of 3 per cent, and the right to refuse to work on Sundays and public holidays. It also gives permanent workers the right to every second weekend off.

Mr Wilson reminded businesses and unions that an intense penalty rates war in Queensland may rebound on both of them, and hurt the local economy.

He said a push by Queensland’s major business bodies for a revamp of industrial laws including more flexible penalty rates and minimum wage hikes linked to productivity could have a negative impact in the competitive hospitality industry.

“If you cut weekend and public holiday penalty rates, you take the motivation to work from many in the restaurant trade, and any pay cuts will inevitably see a rise in staff throwing a sickie at the weekend, adding pressure to colleagues and employers alike,” he said.

Mr Wilson said he understood that businesses want changes to minimum wage increases to ensure they reflect economic conditions and productivity, but penalty rates had been a fact of business life for decades and businesses should know how to structure themselves around the cost overheads.

“Restaurants and cafes do their biggest business at weekends and holidays. If you cut penalty rates you potentially cut the motivation for staff to come to work on those crucial days. You can expect lots of weekend and holiday sickies.

“Some of those working in hospitality, especially as casuals, might find it easier to just go on the dole if their pay is cut so there’s an impact on the economy. I can see the arguments from both employers and workers and there’s no simple solution,” Mr Wilson said.

Mr Wilson said the issue would inevitably be fought on a national political stage at next year’s Federal elections.

“I expect business lobby groups across the country will be lobbying hard to drive down penalty rates, especially in the wake of the South Australia deal for retail sector workers. But unions here will be going to the barricades to fight against changes. Both parties need to consider all the possible impacts, but I fear it’s going to end in tears for some parties,” Mr Wilson said.