The federal government will oppose a proposal, backed by Coles and Woolworths, to ‘buy out’ entitlements such as penalty rates in exchange for a pay rise — a move Australia’s peak union body has labelled an “act of corporate greed”.
Workplace Relations Minister Murray Watt will file a submission to the Fair Work Commission in response to a proposal that would allow retailers to take away penalty rates, meal breaks and overtime pay for a 25 per cent pay rise.
“We’re hardly going to stand by and let the big retailers like Woolies, Coles and other representatives of big business try to cut penalty rates and other conditions like overtime, meal breaks and things like that without putting up a fight,” Watt told the ABC on Friday.
While some workers may prefer this offer, Watt said negotiations should take place in a “safer, more supervised context” like enterprise bargaining, which allows for negotiated trade-offs.
“The retail award underpins the wages and conditions for around a million workers in our country. If this proposal is accepted, it could flow on to other sectors that rely on penalty rates, such as healthcare and hospitality,” Watt said.
Many of those covered by the retail award earn about $54,000 a year.
“If anyone thinks that Woolies and Coles and the other big retailers are doing this to pay their workers more … well, I’ve got a Sydney Harbour Bridge to sell you,” Watt said.
The proposal to overhaul the retail award is backed by Coles and Woolworths. Source: AAP / Luis Ascui, Joel Carrett
The Australian Council of Trade Unions (ACTU) has also opposed the proposal.
“Australian Unions call on all political parties to pledge they will protect the penalty rates of working Australians from this type of corporate greed,” ACTU assistant secretary Joseph Mitchell said in a January statement.
“Make no mistake: big businesses everywhere will use this as a precedent to push for lower wages in other industries, especially if the Coalition wins the election and rips open more loopholes. No one is safe from wage cuts if this goes through.”
Retailers claim that the 25 per cent pay rise could provide financial stability for workers, particularly those seeking home loans or other financial commitments, and that it would help simplify the retail award.
But Watt said that even with a pay increase, they would still be earning significantly below the national average wage, and losing entitlements such as overtime and meal breaks could lead to greater job insecurity.
“We need to remember that the workers we’re talking about here are not highly paid people … [they] don’t have enormous bargaining power, and we need to preserve those minimum conditions through our safety net,” he said.
The Fair Work Commission is set to hear the case next month.
With reporting by the Australian Associated Press.