Finance Work The case for: Penalty rates are vital
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The case for: Penalty rates are vital

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Penalty rates are paid because people are working when the boss is not. They are missing out on social interactions with friends and family, and jeopardising that work-life balance to which employers and governments like to pay lip service.

Overtime, weekend and public holiday work do attract penalty rates, and so they should.

Those who scream the loudest about them – in retail, hospitality and health care – are those where pay is notoriously low.  It is penalty rates that often allow these workers to make ends meet. The removal of them would constitute a major pay cut, and necessitate an overhaul of wage structures in those industries.

Penalty rates are paid because people are working when the boss is not

People like to take partners and kids shopping or out to a restaurant on the weekend, because that’s when everyone has time off together. Shouldn’t retail, hospitality workers and others have the same right? If they haven’t got the same opportunities because they have to work, they should be compensated.

There’s a chestnut doing the rounds that we live in a seven day a week, 24-hour economy, and what a lot of nonsense that is. Kids go to school from Monday to Friday, sporting fixtures are based on Saturdays and Sundays, and scheduling AFL and NFL Grand Finals for a Monday afternoon would be unthinkable.

If a manufacturing employer, or any other, needs work finished in anti-social hours, the people asked to extend their working day should get something extra for their trouble. If overtime rates discourage employers from perpetually asking for extra hours from their workforce, and hire extra hands instead, that’s a good outcome all round.

Overtime is a big ask at the end of the working day and commonly a last minute request. It is exhausting and it is disruptive, often necessitating special and costly arrangements for things such as childcare and meal preparation.

It is penalty rates that often allow these workers to make ends meet

It is 100 years since Ford in the U.S. cut working hours from nine hours a day to eight, and experienced a surge in productivity and profits (the carmaker doubled wages at the same time, but that’s another story). It was a decision that gave the eight-hour day movement a huge boost.

Eight hours labour, eight hours recreation and eight hours rest remains a valid goal today, just as it was in 1856 when stonemasons marched through the streets of Melbourne in their fight to gain it.

In the current debate, shift allowances have become swept into the discussion, and that is quite wrong. They are not penalty rates and apply for regular rostered shifts. The two should not be confused, and neither should the balance between work and life.

Ben Davis is Victorian branch secretary at the Australian Workers’ Union