New Penalty Rates Threaten Retailers’ Christmas and Jobs
Christmas is just around the corner and already retailers have been getting all of their ducks in a row for a while now. But, Fair Work is throwing them a curve ball.
From 1 November this year, penalty rates will be introduced for casual retail workers who work later than 6.00 pm during the week. The Fair Work Commission believes the move is crucial in helping achieve a “modern awards objective.” The Commission also wants to bring the casual work sector in-line with similar awards for full-time and part-time workers.
With Christmas being one of the busiest and most important times of the year for retailers, it’s worth taking a quick look at exactly how the changed award system will affect business owners. It’s worth noting that these changes will occur slowly over a number of years in order to allow time for companies to adjust.
Casual Worker Penalty Rates (inclusive of Casual Loading Rates) for Hours Worked after 6 pm
- 1 November 2018 Additional 5 per cent
- 1 October 2019 Additional 10 per cent
- 1 March 2020 Additional 15 per cent
- 1 October 2020 Additional 20 per cent
- 1 March 2021 Additional 25 per cent
Penalty Rates for Hours Worked on Saturday
There are also changes to the award scheme for casual workers working on Saturdays. Currently, there is no indication how these changes will be implemented. Although, it is expected that overtime work on a Saturday won’t be affected and a long transition period will allow for employers to be well aware of the changes.
- 1 November 2018 Additional 15 per cent
- 1 October 2019 Additional 20 per cent
- 1 March 2020 Additional 25 per cent
Changes to Sunday Penalty Rates
Although most of these changes benefit casual workers, not all of the Commission’s decisions went their way. The Fair Work Commission reduced the award scheme for hours worked on a Sunday. This reflects the greater earning capacity throughout the week. Like the other changes, these too will undergo a transition period.
Full-time and Part-time Workers
- 1 November 2018 195 per cent
- 1 July 2019 190 per cent
- 1 July 2020 175 per cent
Casual Workers (inclusive of casual loading)
- 1 November 2018 220 per cent
- 1 July 2019 215 per cent
- 1 July 2020 200 per cent
How will changes to penalty rates affect retailers, workers and job seekers?
Christmas shopping relies on huge numbers of extra casual workers stepping up to help lighten the load during the busy time. Retail has always been a popular destination for workers. Currently, 31% of JobGetter’s job seekers have indicated that retail is one of their preferred industries.
These changes to penalty rates could mean that there are fewer opportunities for both job seekers and retailers. This is especially true for the businesses that rely on the extended trading hours of the holiday shopping period. According to the executive director of the Australian Retail Association, Russell Zimmerman, these changes will negatively affect more than 150,000 retailers. With retailers feeling the pinch, it may mean less job opportunities available next year when the changes have been in place for a year because they will be less likely to bring on as many casuals or restrict the shifts of their casual workers, especially smaller retailers.
In Australia, Retail is responsible for employing 10% of the working population and has always been a strong sector for youth and female employment. But, Retail as an industry is facing a host of challenges which have negatively affected the number of job opportunities available. We’re already seeing increasingly more jobs lost to technology such as cashiers and cleaners being replaced by machines which means fewer jobs for those looking for their first job, a flexible job or a job that doesn’t require experience. And the pressures on retailers mount, we’re seeing an increasing number of retailers going out of business which means even more job losses.
So, while most casual retail workers will be celebrating the early Christmas present that has dropped in their laps this year, they may not be as excited next Christmas if it means fewer hours or possibly no work at all. And, you can be sure that there will be a lot of retailers who will be more than unimpressed with the lump of coal Fair Work has gifted them this holiday season.