For the first time, Australian workers have a clear idea of exactly how their Sunday wages will be impacted by the combination of penalty rate cuts and minimum wage rises.
Calculations by the ACTU and the Australian Chamber of Commerce and Industry show that minimum-wage workers in affected industries will get a small pay increase on Sunday June 4 (without adjusting for inflation).
This is because the Fair Work Commission has increased the minimum wage by 3.3 per cent, its biggest increase in recent years, and delayed the full cuts to Sunday penalty rates.
While this is good news in the short term for workers paid award rates in the hospitality, fast food, retail and pharmacy sectors, these same workers will suffer a wage cut on July 1, 2018, and July 1, 2019, based on ACTU modelling.
The following table outlines the impacts on gross wages for employees working eight hours on a Sunday, without factoring in inflation.
The Australian Chamber of Commerce and Industry issued its modelling for 2017-18 in a statement on Thursday. It drew attention to the slight overall increase from July 1, which the ACTU did not contradict.
“Sunday pay for almost everyone on awards will go up from this weekend. We are pleased to see the ACTU finally acknowledge this fact,” Australian Chamber CEO James Pearson told The New Daily.
“The changes in future years are based on assumptions and are uncertain, but even on conservative estimates, they clearly discredit the scare campaign being run by unions on Sunday penalty rates.”
But ACTU Secretary Sally McManus said it was “misleading and self-serving” for the business group to claim that workers would not be worse off without penalty rates.
“The government voted to cut penalty rates, and business groups have argued that this will mean that businesses will now have more money, which shows they understand that cutting penalty rates is a cut in wages,” Ms McManus told The New Daily.
“Given that company profits are up 40 per cent, wages are stagnant and inequality is at a 70-year high, it’s outrageous that working people on the lowest wage rates are having their pay cut.
“At the same time, the Prime Minister and his government will receive a four per cent raise on July 1.
“Labor has committed to reversing the penalty rates decision if it wins the next election. Employers now have to make a choice about whether they cut their workers’ pay.
“In the meantime, Australian Unions will be using all its might and power to let employers know cutting wages is bad for business.”
On June 5 the Commission ruled that the much-anticipated cuts to Sunday penalty rates would be gradually phased in until 2020.
Employer groups had urged the Commission to not phase in penalty rate cuts at all, arguing this would boost employment sooner, while unions had asked for the cuts to be postponed for two years or for currently employed workers to be quarantined.
From July 1 this year, Sunday penalty rates will be cut by 5 percentage points across the four sectors for full- and part-time workers, bringing penalty rates to 145 per cent for fast food; 195 per cent for pharmacy and retail; and 170 per cent for hospitality.
The immediate impacts of these cuts have been softened by the Commission’s decision to increase the minimum wage by 3.3 per cent, also from July 1.
The Australian Industry Group had proposed a 1.5 per cent increase, the Australian Retail Association 1.2 per cent, and the ACTU 6.69 per cent.