Push to trade penalty rates for higher wages sparks pay-cut claims

Labor’s calculations are based on a roster from 6pm to 2am, Thursday to Monday. Workers would have to agree to the arrangement, under which they would earn about $57,000 a year.

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National Retailers Association head Dominique Lamb said many workers on different rosters would earn $13,000 more a year if they took up an “exemption rate”, which would set base pay at 1.25 times the minimum rate.

Asked whether it would try to reverse the Fair Work Commission’s decision if it endorsed the retailers’ proposal, Labor’s industrial relations spokesman, Tony Burke, did not comment directly.

“Right now we are fighting to stop workers having their pay cut,” Mr Burke said, in a reference to Labor’s belief employers would use a provision in the government’s separate industrial overhaul to strike pay deals that left workers worse off.

The party confirmed at a caucus meeting on Tuesday it would vote against the proposed laws in both the House of Representatives and Senate.

Mr Porter, who is also Industrial Relations Minister, said Labor’s attack was misleading as it ignored the Fair Work Commission’s independence and claimed many workers would get a pay cut.

“Labor is not … working co-operatively with the government to help save lives and livelihoods,” he said.

The Restaurant and Catering Association has proposed a similar exemption rate, where chefs on higher pay grades could earn 150 per cent of the award rate – a minimum of $85,566 a year – in exchange for forgoing penalties, overtime and allowances.

Employer groups believe the complexity of calculating penalty rates and allowances is one of the factors behind a recent run of underpayment claims including at retail giants Woolworths and Coles, and restaurant chains run by a number of celebrity chefs.

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“We believe these changes are moderate, practical and pragmatic and deliver what the industry needs to recover,” RCA chief executive Wes Lambert said in a statement.

Data from the Fair Work Ombudsman compiled for the award process shows 29 per cent of accommodation and food services businesses and 28 per cent of retailers that faced a worker complaint either had to repay money or faced other enforcement.

The Australian Council of Trade Unions will oppose the RCA’s plan.

“This proposal seeks to legalise this business model, resulting in significant pay cuts for many workers,” secretary Sally McManus said.

Fair Work Commission president Iain Ross, a Labor appointee, will discuss the proposed changes with employers and unions at two hearings later this week.