The year in review: Winners and losers in the penalty rate debate

piggy bank: penalty rates concept

The Fair Work Commission’s (FWC) decision to reduce penalty rates continues to be contentious, particularly for pharmacy assistants—we look at what unfolded this year

The FWC’s decision, which came after almost two years, 39 days of hearings, statements from nearly 145 witnesses and reading through 5900 submissions, saw Sunday penalty rates for full and part-time retail workers cut from double time, to time and a half.

For pharmacy, the FWC agreed that the new rates phased in by 2020:

  • Full-time employees at cut from 200-150%
  • Part-time employees: a cut from 225-175%.

According to manager of policy, Edward Cavanough at the left-leaning McKell Institute, who is the author of a number of reports on the topic, initial estimates about the number of people affected by the decision are around 700,000 workers—including 40,000 pharmacy workers.

Its own analysis found that 55% of those affected by the rate changes are female.

“The proposed changes most severely impact those who earn the lowest incomes, particularly students and other workers who rely on weekend work,” said Mr Cavanough.

However, proponents of the changes said they would free-up money, resulting in the creation of new jobs, and more flexibility for business.

For pharmacy, there would be an increase “in the level and range of services offers, and as a consequence, an increase in the number of staff employed and hours worked”.

The Pharmacy Guild’s submission to the FWC included a report by Deloitte Access Economics. The report claimed many workers, such as women with family commitments, or university students, preferred evening, night or weekend work as it gave them flexibility when it came to other commitments.

Guild executive director, David Quilty said it supported a sensible transition to enable community pharmacies to maximise the number and quality of the job opportunities in their businesses while ameliorating any financial impact on pharmacy staff.”

One pharmacist, who swore an affidavit in support of the Guild submission to the FWC, said their pharmacy receives complaints about the three days each year that it is not open – Good Friday, Christmas Day and New Year’s Day – but that due to penalty rates it was not viable to open these days.

 “I run the pharmacy on skeleton staff at times when penalty rates are incurred. This means that it is not possible to offer a number of services at these times.

“Given staffing is kept to a minimum at times when penalty rates are incurred, it is difficult for pharmacists to spend time with patients and provide them with the best healthcare service possible.”

“It would mean that I could roster more staff on and hire additional staff members.”

However, the FWC was unable to specify the number of jobs created by the proposed changes.

“In contract, we have a pretty clear estimates about how much money will be syphoned out of workers’ back pockets—more than $800m in income is expected to be lost in rural areas alone; while workers in urban areas lose collectively $760m a year,” said the McKell Institute’s Edward Cavanough.

However, he pointed out that owing to comparably small number of pharmacy workers affected—compared to the hundreds of thousands in other industries—the impact on pharmacy workers has been largely ignored.

“This is unfortunate because pharmacy workers play a vital role in the healthcare of communities. In addition, while workers in other affected areas industries generally less skilled, many impacted workers in pharmacy are highly trained, skilled professionals.

“Policy makers seeking reductions in penalty rates in key services sectors, like pharmacy, should be cognisant of the fact that a reduction in penalty rates could make careers in those industries less viable,” he added.

“Many communities desperately need pharmacy workers, particularly in regional areas. It is, therefore, vital that adequate remuneration remains in place to encourage talent in such an important industry.”


The action

Unsurprisingly, the unions and the some politicians were at the vanguard of the fight to prevent cuts.

The SDA—the ‘shop assistants’ union’—said the impact of cutting penalty rates for pharmacy staff was profound.

 “If cutting penalty rates to pharmacy workers motivates them to find work elsewhere, the community may suffer as a result, “said the SDA.

The SDA said it was prepared for a “hard battle.” 

“Pharmacy assistants are already some of Australia’s lowest paid workers, and can’t afford, nor deserve, a cut to their weekend penalty rates,” its national secretary Gerard Dwyer said.

Jo-anne Schofield, national secretary of United Voice, said the first incremental cut of 5% was “only the start”, with “bigger and harsher” cuts around the corner.

Both unions said they would take their fight to the courts.

 “We believe the decision to slash penalty rates failed to have sufficient and proper regard to the cornerstones of our wage setting system – that in delivering a pay cut, the FWC failed to consider ‘the relative living standards and needs of the low paid,’” said Jo-anne Schofield.

The chair of a Senate Committee investigating the issue also called for penalty rates to be restored.

The Committee heard there was “mixed evidence” on whether cutting penalty rates would boost employment and that paying penalty rates were unlikely to be the sole factor in stopping businesses opening on a weekend.

“Penalty rates are not an optional extra for such workers; they make the difference to individuals and families’ ability to house and feed themselves to a basic standard considered acceptable in our society,” Committee chair and ALP Senator Gavin Marshall said.

He recommended that the Government “Legislate to overturn the FWC’s Commission’s decision.”

However, the two Coalition members rejected this call.

Meanwhile, a three-day hearing in the Melbourne Federal Court, brought by United Voice and the SDA, argued FWC’s decision was “unreasonable” and there had been jurisdictional errors in failing to consider how the cuts would affect low paid workers. 

However, the Court rejected the union’s claim.

The SDA said it was “bitterly” disappointed by the decision.

However, the debate continued unabated as Shadow Minister for Employment and Workplace relations, Brendan O’Connor, proposed an amendment to the Fair Work Laws Amendment (Proper Use of Workers Benefits) Bill 2017, which was read in the House of Representatives in late October, and now sits before the Senate.

In the House of Representatives, Minister O’Connor called on the Government to abandon its support its support of the FWC decision.

But on the third day of reading the Bill, a vote on the amendment was lost 68-73.

Meanwhile as the Bill enters the Senate, Labor continues to rally on the issue.

“But this mob wants to cut penalty rates. They support cuts to the penalty rates of 700,000 Australian workers, most of whom are the working poor, the real battlers, and those that need their penalty rates to actually put food on the table and a roof over their heads,” said Senator Cameron, who is the Shadow Minister for Housing and Homelessness.


What staff said on social media

(All comments have been de-identified)

 “If this means the business I work at stays afloat then it’s better to take the cut. I understand it will be a huge loss for those who rely on the extra money but the world is changing, consumers expect more – longer hours etc and someone has to draw the line somewhere.”


“I think pharmacy assistants are so underpaid for the experience and knowledge they require and have. Cut the Sunday rates etc if they must but please increase the base rates for pharmacy assistants… Pharmacy assistants (all the ones I know) are passionate, caring and go above and beyond for their employers and customers.”

“I think staff will be less inclined to put their hands up to work Sundays & public holidays with the new penalty rates & pharmacies may find it hard to cover these shifts.”

“I work full time which includes every Saturday so it’s fair to say that I am not happy about the change. However, I enjoy my job and it has never been about the money.”

“Pharmacy assistants are one of lowest paid in retail staff, cutting penalty rates I think it will be become harder to find committed staff in the future.”

 “It’s not fair… I have a 4 month old and have gone back to work weekends for some extra income for the family..miss out on family time together as Hubby only gets weekends off. With the cuts, it’s going to be not worth going back to work. I’ve been in pharmacy 20 years …love working in this industry. But to drop pay is ridiculous pharmacy in general is under paid as it is.”

“I think our wage value for that we do in pharmacy is too low anyway and this just makes it worse.”

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