Bookmark and Share

Productivity Commission report attacks penalty rates, minimum wage and rights at work

05 August 2015 By ACTU & ASU

Unions have always said the Productivity Commission Inquiry was called by the Abbott Government in order to cut penalty rates, the minimum wage and rights at work – the interim report released yesterday confirms that.

150805-attacks-on-rights-by-stealth-800pxwPenalty Rates to be cut

The report calls for a two-tiered workplace system with Sunday penalty rates to be cut for workers in hospitality, entertainment and retail but remain the same for health and emergency service workers.

What that means for ASU members in airlines (is this considered retail?), local government, energy (is that classified as an emergency service?), call centres, etc, we are yet to determine as the Report is silent on this.

The proposed change to Sunday penalty rates is a pay cut for thousands of Australians who work in restaurants, cafes and shops around the country, and perhaps many more, depending on how widely the recommendation is intended to be imposed.

There is no evidence to show that cutting penalty rates increases employment or productivity – it is simply a raid on people's wages that will create an underclass of working poor.

With less money in their pockets to spend, cuts to low paid workers take home wages will result in businesses taking the second round of hits, usually small businesses in regional and rural areas who can least afford it. With consumer confidence already low, the proposal to cut penalty rates is especially bizarre!

It is worth noting also that in proposing a two tiered approach to penalty rates, the Productivity Commission is effectively saying that some people's weekends are more important than someone else's.

Minimum award wages to stagnate

Minimum wage increases that 1.86 million Australians rely on will stagnate under the Productivity Commission's recommendations and will not take into account rising costs of living.

The gap between the minimum wage and average wages is currently the widest on record yet the Productivity Commission recommends using this as the starting point for future minimum wage increases, linking those increases to productivity and cutting this modest increase even further during high unemployment.

This means the gap between workers on average and minimum wages will never close and inequality in Australia will increase.

The ASU submission highlighted the fact that women workers are overrepresented in low-wage work, and therefore, we argued, minimum wage increases are an important tool in ensuring the gender wage gap doesn't increase any further.

Attacks on rights at work

Rights at work are also under attack with a recommendation to expand individual contracts that would sit outside the award system, which is the safety net for the most vulnerable workers.

This is worse than Australian Workplace Agreements (AWAs) that were put in place under the former Coalition Government's WorkChoices laws and saw workers given no choice but to sign unfair agreements that removed their rights and conditions.

Hundreds of thousands of Australians marched against the former Coalition Government's industrial laws merely eight years ago and despite Tony Abbott's promises that the old WorkChoices regime was "dead, buried and cremated" (and we all know how much we can trust those promises), this Federal Government appears intent on reviving this hated system of workplace regulation.

The Productivity Commission report also takes away payment for public holidays, attacks the power of the Fair Work Commission which is the independent umpire and makes it harder for employees to get help from their union.


The ASU and the union movement in general will fight any move to cut the minimum wage, penalty rates and rights at work in general. Actions at hearings of the Productivity Commission are being organised so we can all demonstrate our support for penalty rates, the minimum wage and all of our rights at work – more details here:

>> Attend a Productivity Commission hearing to show your support for our rights at work!

Australian Unions call on the Abbott Government to rule out these recommendations and protect the wages and rights at work of millions of Australians.

"This draft report from the Productivity Commission is a slap in the face to all those submissions made not only by unions but by ordinary workers, who shared their stories with the Productivity Commission via hundreds of individual submissions," said ASU Assistant National Secretary Linda White.

"We're not surprised by the Productivity Commission's report because we predicted that they would present Tony Abbott with exactly the workplace reforms he wanted, whilst giving him the opportunity to wash his hands of direct responsibility."

"And the advantage of not being surprised is that we are ready to fight these proposals!" Linda White concluded.

The ASU submission lodged in March this year expressly supported current legislated minimum entitlements that provide for a strong and secure safety net of working conditions and entitlements through minimum wage decisions, Modern Awards and the National Employment Standards as our experience indicates that a strong and secure safety net is vital to ensuring workers receive a fair and reasonable wage (see the summary of key ASU issues and recommendations from our submission below or read the full ASU submission here).

The ASU will be lodging a supplementary submission in response to the Productivity Commission's Draft Report.

Submission to Productivity Commission Inquiry - summary of key ASU issues and recommendations

The ASU submission was lodged in March 2015.

  1. Minimum wage – The review of minimum wages should be removed from the Productivity Commissions terms of reference. Minimum wages should be set by an Expert Panel of the Fair Work Commission as per the current Fair Work Act.
  2. Minimum hours - The intention of the legislation was to provide for a 38 hour week entitlement. There should be guaranteed regular hours and employees must have an absolute right to refuse to work in excess of this period [unless under an averaging system]. The words in Section 62(1) 'unless the additional hours are reasonable' in the Fair Work Act should be removed to guarantee all employees work the same number of hours per week.
  3. Flexible work arrangements – The Fair Work Act should be amended to allow employees to access dispute settling procedures about the refusal of flexible work arrangements on "reasonable business grounds".
  4. Penalty rates - Penalty rates should be removed from the Productivity Commissions terms of reference. The ASU believes penalty rates should be set by the Fair Work Commission in accordance with the Fair Work Act in its current form.
  5. Good faith bargaining - Employers should not be permitted to put agreements to employees without a declaration by FWC that the process of bargaining has been exhausted. Similarly, once an employer has commenced any form of communication with employees about the possibility of any type of collective agreement, the employer should be required to issue the notice of employee representational rights, to ensure that all bargaining agents are on the same footing and can represent and bargain effectively on behalf of those that they represent.
  6. Permitted matters - The Fair Work Act should be amended to remove the restriction on permitted matters for bargaining.
  7. Multi-employer agreements - The Fair Work Act should be amended to allow additional employers to be added to an existing MEA in appropriate circumstances. In addition, employees covered by MEA's should be able to take industrial action during bargaining under the Act, like all other employees.
  8. Industrial action - Employers should be required to give three working days' notice to bargaining representatives and employees of any proposed employer response action.
  9. Unfair dismissal - An unfair dismissal applicant should have access to a face-to-face conciliation where the applicant believes that this will result in a greater likelihood of the matter being resolved at the conciliation stage.
  10. Unfair dismissal – All unfair dismissals should be the subject of a conciliation conference and genuine attempts at conciliation, including the power to compel persons to attend conferences. Further, where there are reasonable prospects of an agreed outcome, conciliation officers should be empowered to adjourn matters enabling the parties to exchange documentation and reach a settlement.
  11. Independent contracting –The Fair Work Act should be amended to strengthen the sham contracting clause and provide a clearer definition of a genuine independent contracting arrangement.
  12. Transfer of business - Transfer of business rules should be amended so employers do not have the opportunity to outsource work through corporate restructure thereby avoiding the requirement to apply existing industrial instruments. The test should be whether work has transferred, whether or not there is a direct transmission and whether or not there are transferring employees.
  13. Family friendly work arrangements - Family friendly work arrangements should form part of all modern awards.
  14. Domestic and family violence - Domestic and family violence leave should form part of all modern awards.
  15. Equal remuneration – Consideration should be given to a non-adversarial scheme for correcting the undervaluation of women's work. The recommendations in the "Making it Fair" report should be implemented in full.
Contact Details
Name: Linda White, ASU Assistant National Secretary
Telephone: 03 9342 1400