Reverse the ‘devastating’ cuts to penalty rates: Inquiry


hand out for money - coins in palm

A report has found no evidence the 2017 cuts created new jobs or increased hours for workers, and warns they will result in wage stagnation for the pharmacy industry

The Parliament of Victoria’s final report on its inquiry into penalty rates has found the reduction in rates is already having a significant detrimental impact on thousands of workers in the affected industries.

In 2017, the first round of penalty rate cuts saw Sunday and public holiday work rates drop by 5%. The full penalty rate reduction rollout is expected to be completed by 2020.

So far the effect of the cuts has hit particularly hard on women, young people and employees in rural and regional parts of the state, says the Penalty Rates and Fair Pay Select Committee.

In addition, the benefits that were promised to flow from the cuts have not eventuated, the committee argues.

“Although employer groups argued that a reduction in penalty rates would result in greater employment and more hours for part-time workers, they provided no evidence to substantiate these claims,” states committee chair Gabrielle Williams, Member for Dandenong.

“There is no evidence that new jobs have been created, or additional hours offered, following the first round of penalty rate reductions,” the report finds.

Professional Pharmacists Australia advised the inquiry that there has been no increase in the opening hours of pharmacies, or more pharmacists employed following the first penalty rate reduction.

However they also advised that not all pharmacies have passed on the changes to penalty rates.

The inquiry findings confirm the results of a late 2017 survey of more than 1,000 retail and hospitality workers, which found no evidence that cutting Sunday penalty rates led to more hours for workers or employers hiring additional staff.

Chris Walton, CEO of Professional Pharmacists Australia, is cited in the report as pointing out the important role that pharmacists play in the community as health professionals.

He states that pharmacists, with a graduate’s starting salary at $42,000 per annum in comparison to $65,000 for medicine, and an average wage of $31 to $32 per hour, are one of Australia’s lowest-paid health employees.

Mr Walton also shared his concern that pharmacists are seen as just part of the retail sector, rather than as an integral and valued part of the health system.

The penalty rates cuts will have longer-term impacts on the economy, the inquiry found.

“The Fair Work Commission’s decision has come at a time when Australia has endured close to six years of stagnation, or minor increases, in wages,” says the report.

“The penalty rate reductions will result in wage stagnation or wage reductions for employees in the retail, fast food, hospitality and pharmacy industries who depend on penalty rate work for a significant proportion of their income.”

The Committee calls on the Federal Government to restore penalty rates in the relevant awards to their previous levels, and legislate to ensure the Fair Work Commission cannot vary an award and reduce take-home pay in future.

Early last month, the Fair Work Commission announced a 3.5% increase in pharmacy award minimum pay rates, with commensurate increases in hourly rates on the basis of a 38-hour week.

However from 1 July the second round of penalty rate changes also came into force, removing the variance between Sunday and Saturday rates.

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