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Minimum pay and conditions under microscope

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· PM has misrepresented SPC troubles, says Lib MP
· Job losses could trigger rate cuts

The Abbott government has urged the national workplace tribunal to conduct a “comprehensive examination” of minimum pay and conditions contained in the award system to contain employment costs.

A submission on behalf of the Employment Minster, Eric Abetz, argues that the “softening economic environment and labour market should be carefully considered” by the Fair Work Commission during a four-yearly review of the award system.

“In particular, the Commission should consider the impact of employment costs on employers’ decision to hire workers over the next four years,” the submission said.

The submission acknowledged that the review had the “potential for significant changes to modern awards”.

But Senator Abetz’s office did not answer a question from The New Daily on whether the government would support award changes that would lead to cuts in real wages.

“It would not be appropriate to provide additional commentary whilst the proceedings are under way,” said a spokesman for Senator Abetz.

“The government’s position is as set out in the submission.”

Employer groups in the hospitality, tourism and retail sectors have previously flagged that they will renew their arguments to cut penalty rates for working on weekends and public holidays.

Submissions from the Queensland Tourism Council and the Australian Hotels Association show they will also argue for easier access to flexible part-time.

Restaurant and Catering Australia argues that about two thirds of businesses in its industry have an average return of 2 per cent after tax and need changes to stay in business.

The award system sets minimum pay and conditions across a range of industries and occupations.

Most workers are paid at above award rates but the system underpins the enterprise bargaining system between employers, employees and unions.

The ACTU will strongly defend existing pay and conditions in awards, while pursuing seven claims through the review.

These included protections around casual employment, support for victims of domestic violence and flexible working hours for mothers returning from maternity leave.

ACTU assistant secretary Tim Lyons said the Commission had rejected numerous employer calls to cut penalty rates because there was no credible evidence that penalty rates have a negative impact on employment or profits.

“But what we are also seeing is a new assault on the rights of part-time workers as well – in terms of employers seeking to ‘remove unduly inflexible’ part time provisions,” Mr Lyons said.

“This can only mean that employers are seeking to engage part time employees as they would casual employees and do away with set weekly hours and overtime payments when a part-time employee exceeds their daily or weekly hours.

“If these claims were granted we will see a group of workers being treated like casuals while at the same time not receiving any casual loading in exchange.”

The Commission will convene an initial conference of employers and unions in Melbourne on Wednesday and the process will take some months to work through.

The former Labor government pushed through changes to the Fair Work Act last year which required the Commission to consider payment of penalty rates for employees working at particular times.

But the government and the Australian Chamber of Commerce and Industry argue that this applies only to existing entitlements, rather than extending penalty rates to new groups of workers.

The award review comes as the government is already under political pressure for claiming that pay and conditions at the fruit processor SPC Ardmona that were negotiated through enterprise bargaining were overly generous.

The company’s managing director Peter Kelly said claims that SPC Ardmona was a “union shop” or that the problems were caused by allowances and conditions were “mistaken and need to be refuted by the facts”.

Mr Kelly said:

· the total cost of allowances for all production staff at SPC Ardmona for the entire year of 2013 was 
$116,467, less than 0.1 per cent of the business’s cost of goods for the year;
· SPC Ardmona employees got 20 days annual leave, not nine weeks as claimed;
· 32 per cent of positions across the business had been cut since 2011, while maintenance work was outsourced last year.

Mr Kelly said the employees were aware of the critical and urgent need to transform the business and the majority responded in practical and financial ways to lift productivity to help secure its long term in future in the Goulburn Valley.

“We have been assessing work practices for many months, and have made significant improvements in productivity,” he said, adding: “We are doing our best to reduce all costs across the business, however the serious problems that have beset SPCA have not been because of labour costs and certainly not from the allowances, a fact borne out by the Productivity Commission’s recent analysis.”

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