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A seven day economy; History in the making

A seven day economy; History in the making (Last Updated On: August 9, 2016)

Prime Minister Malcolm Turnbull is waving a red flag this week to defend the possibilities of rising young unemployment rates, increased GST paid by wealthier inner-city café goers and ongoing pressures from unions. Penalty rates are again in the spotlight and could even be a game changer at the next election.

The 21st century has brought on a more dynamic economy where we now live and work in a seven day economy. The only thing tying us to penalty rates is the ‘artefact of history’.

Turnbull said that workers relying on penalty rates would be naturally reluctant to give up their benefits and that “any reform has got to be able to demonstrate that people are certainly not going to be worse off”. Overall the in net terms, will Australia be better off and more suited to our ‘seven day economy’?

Compensation for weekend workers

Prior to any change, a Better Off Overall Test will be conducted by the Fair Work Commission, who ultimately hold the decision making power. However there have been some suggestions on how to compensate those working on the weekends, some of which include:

  • Raise weekday wages
  • Increase goods and services tax for purchases made over the weekend
  • Income tax cuts for those working on the weekend

Advantages of removing penalty rates

Before everybody complains about increased GST there are other factors in the debate to consider.

Ultimately it has to be a collective decision made by the people of Australia but as a business that supports employers, Employsure believes a change could achieve strong results. Below are our reasons why:

  1. Some employers and business owners really struggle to make a profit on the weekend, due to wages that greatly exceed the opportunity for profit. This reform may enable them to open for business and thrive from all the Australians who are relying on hospitality, retail and other serves over the weekend
  2. A change in what we see as a restrictive wage system, will ease pressures but still protect employees with Modern Awards. Modern Awards govern the wages across all industries and protect the most vulnerable employees. They ensure that employees are paid enough to meet the countries living standards. These Modern Awards are reviewed frequently and should penalty rates be abolished, they will still stand to protect Australian workers
  3. Less work will be sent offshore meaning many businesses will be able to make use of Australian resources and produce as a result of weekend opening hours. This is a plus for the economy
  4. All employees working for businesses who currently cannot afford to trade over the weekend will be receiving a wage even if it is not inflated

Hanging on the words of Malcolm Turnbull, a change in penalty rates is inevitable. Penalty rates can be likened to a bull in a china store, and it just goes to show that employment relations really is confusing and draws a lot of attention. Employers need to be ahead of the game and seek advice to ensure that they are meeting the ever changing and evolving Fair Work Act. If you have any questions relating to current Modern Awards or if you would like to review the amounts you currently pay your staff, call Employsure on 1300 651 415.

Employsure is Australia’s leading employment relations specialist and we pride ourselves on helping over 7 thousand businesses to correctly pay their staff and meet all employment relations obligations.

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