Productivity commission inquiry into workplace relations framework

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australian government productivity commission logo




MR P HARRIS, Presiding Commissioner

MS P SCOTT, Commissioner


















HA TRAN 267-286


MR HARRIS: Good morning. I’m Peter Harris, the Chairman of the Productivity Commission. This is Patricia Scott on my left who’s Deputy Chair at the Productivity Commission, and we’re the Commissioners on the Workplace Relations Inquiry. The purpose of this round of hearings is to facilitate public scrutiny of the Commission’s work and to get comment and feedback on the draft report. Following today in Melbourne we will be in Canberra, then Adelaide, Sydney and Ipswich, and we’ve been in Bendigo and Hobart.
We will have a final report done for the end of November 2015, having considered all the evidence presented at this hearing and in submissions and other informal discussions that are going on at the moment, as well as general feedback on the draft. All participants and those who have registered their interest in this inquiry will be advised via email of the report’s final release by the government, which may take up to 25 Parliamentary sitting days after the report is delivered to the government, which means effectively sometime early next year.  May take that length of time.
We like to conduct all hearings in an informal manner, but I remind participants a full transcript is being taken which means for all participants your words are recorded. For this reason, comments on the floor can’t be taken but at the end of proceedings for the day I’ve been making an opportunity for persons who wish to make a brief presentation and have managed to sit through the whole thing to get up and make a few comments if you wanted to do so. So that opportunity will arrive again at about four or 4.30 or something, for those who’ve got that level of persistence.
Participants are not required to take an oath but should be truthful in their remarks, and are welcome to comment on issues not just in their own submissions but obviously in other submissions and in the draft. The transcript will be made available to participants and will be up on the Commission’s website, probably a couple of days’ time. Submissions are also available on the website. While we do not permit video recordings or photographs to be taken during the proceedings because of the disturbance that might take place, social media such as Facebook or Twitter may be updated throughout the day.
We do ask all members of the audience to ensure their mobile devices are switched to silent.
(Housekeeping matters)
I think we’re going to start off with the Shop, Distributive & Allied Employees’ Association. Please feel free to take any one of the seats that’s available up there. Once you’ve settled yourselves, if you could identify yourself for the record so we can get the transcripts right.
MR DWYER: I’m Gerard Dwyer. I’m the national secretary of the Shop, Distributive & Allied Employees’ Association.
MS GRADEDA: My name is Jhoana Grageda. I work at Zamel’s, Gungahlin.
MS FOX: My name is Julia Fox. I’m a national industrial officer for the Shop, Distributive & Allied Employees’ Association.
MR HARRIS: Do you have any opening remarks to make or do you want us to just start off with general questions based on previous submission, or what’s the process here?
MR DWYER: Chair, I would like to make some opening comments.
MR HARRIS: Go for it.
MR DWYER: I’d note the SDA’s submission filed in March 2015 and would just this morning like to make some supplementary comments on that submission. But particular reference today, we’d like to touch on during the course of the proceedings this morning Chapter 14, which is the penalty rates, and also enterprise contracts which is called out at Chapter 17 of the draft report.
I guess in opening I’d say that the penalty rates in particularly the retail industry have been a feature of the Australian industrial relations environment for over a hundred years. But I guess there has always been a tension in any labour market between wages and - or around wages. But I think our system has shown that that tension is managed and we’ve arrived at a space where the system or the current workplace relations framework provides some certainty for employees as well as for business.
We’re concerned that the current attack on penalty rates is part of that ongoing tension, but it seems to us that there are - this desire to reduce penalty rates, particularly in the service sector which is what we understand to be proposed, the reduction there, we believe that penalty rates unfortunately are quite identifiable and they are exposed components of what, in our view, is really a total weekly wage, a takehome pay.
So for business I guess it’s the total wage bill. For employees it really is about their takehome pay and we’d note in our submission the takehome pay for retail workers with a complete reduction of penalty rates could total up to 25 per cent loss, and we don’t believe that that is fair for those individuals, and we don’t believe it makes for good economics for the community generally.
We’d also note that the existing framework of penalty rates particularly in retail is a result of the 2010 modern award review which was quite a substantial process with wide consultation, enormous amounts of hearings, and we’d note that the penalties adopted usually reflected either a midpoint across the country in terms of various State awards or the most common.
I guess one of the items attracting most attention at the moment is the Sunday penalty rate, and that Sunday penalty rate as reflected in the General Retail Industry Award actually reflects what was in place in Victoria, the ACT, Queensland for non-exempt stores, Western Australia and Tasmania. So it was very much the dominant position and we’d also stress the fact that the award arrived at was actually a package. Okay, so it’s a package of total takehome pay and associated conditions and entitlements.
We’d note that that package, having been put in place so recently and put in place in what was then a deregulated trading market, so there has been no change on that front, we have a penalty structure put in place recently and put in place in a deregulated environment; and we don’t believe that in that package one item should be taken out in isolation like the Sunday penalty and therefore modified.
I’d note that there were a number of things in the development of that award that formed part of the package but weren’t of or didn’t arrive at a position which was pleasing to the SDA. The 33 per cent casual loading in Victoria was lost for example. The other thing that was lost was standalone overtime hours in terms of the spread of trading hours. We now have a retail award which permits 24 hours a day trading, seven days a week in terms of with no overtime being applicable to any given hour. Overtime is only attracted by the number of hours an individual may work.
But anyway, all of that we say is settled and was part of a package in 2010 that was the result of an enormous amount of work from all parties and enormous amount of consultation. We’d also say that particularly the employers at the moment are giving enormous focus to the issue of extended trading in retail and that somehow because of extended trading we need to bring about changes to the existing penalty structure.
We’d submit that the penalty structure put in place now was done at a time when that deregulated trading was in place, and we’d also say that that issue of the prevalence of the use of extended trading shouldn’t be given primacy over other aspects of the workplace which need to be considered, and a lot of those are obviously situated - or, sorry, focused on employees.
The fact is that there is still an impact on those who work weekends and late nights. There’s an inconvenience and in our submission we framed that using the research language of disability associated with working unsociable hours, and I’d just note that we deal with that in some detail on page 27 onwards and one of my colleagues will go to some of that research later.
But there’s also the issue of taking into account the needs of the low paid. The total award rate for a fulltime shop assistant at the moment does sit just under $38,000 a year which by Australian standards is low pay. So the conversation around penalty rates needs to be appreciate that this conversation is taking place for employees who are already amongst the lowest paid in the Australian community.
I’ve already called out the fact that the existing penalties were set in a deregulated trading market in 2010, but I’d remind the Commission that in 2012 there was an extensive review again in the interim award review, and again our existing penalty rate structure was deemed to be fair and relevant. In closing I’d just say that this issue of employees will agree to work or have agreed to work so therefore that lessens the disability or adverse effect, we don’t accept that.
People are often in a position where they have to take what they get, but that doesn’t remove the size of the impact on those individuals as family members, as members of friendship groups and as members of their communities, and civic participation is an important component of this.
We’d also state that there is some focus on students and young people, and in our submission we’ve called out some research from Dr Woodman, but Jhoana is with us today and she is someone who is young and is a student and we believe would add something in terms of the Commission’s understanding of this issue. So they’re my opening comments.
MR HARRIS: Okay, do we want to go to Jhoana next or do you want to - I don’t mind if you guys want to work out a way to do this?
MS GRAGEDA: Yes, hi, my name is Jhoana. I work at Zamel’s Gungahlin and I’m also studying parttime at the University of Canberra. I’m studying architecture. My family came to Australia in 1991. We came to Australia with nothing, to improve our lives, and about seven years ago I moved to Canberra to study. My family was supporting me.
My father was paying for my rent, my internet, my food and everything, and then that was causing a lot of problems between my parents, because my sister was also studying at university and we had a younger brother as well. So it caused a lot of conflict so I decided to apply for Youth Allowance and that wasn’t very much. So I decided to stop studying fulltime and I started studying parttime and in order to do that I had to work Friday nights and weekends so I could support myself.
So it might not seem too much money for companies to take away the Sunday rate but for me it affects my entire life. I honestly don’t know what I would do if they did take that away because that’s how I want to support myself. I want to contribute to society in a positive way so yes, it impacts quite a lot.
MR HARRIS: How many hours do you work on a Sunday?
MS GRAGEDA: Six and a half. So we open at 9.30 and close at 4.15.
MR HARRIS: And on a Saturday?
MS GRAGEDA: On Saturday we open at 8.30 and we close at 5.15.
MR HARRIS: And Friday night?
MS GRAGEDA: I work from 1 pm to 9.15.
MR HARRIS: And those are the three days you do a week?
MR HARRIS: And the rest of the time you’re a student?
MS GRAGEDA: Yes. So it gets very tiring and I have to make different sacrifices. For example, this Father’s Day I couldn’t see my dad because it was I have to work or do I go home? So it gets really hard.
MR HARRIS: So the pay level you’re suggesting is sufficient to compensate for that, the current pay level?
MS GRAGEDA: Yes, because on Austudy you didn’t get very much. So by working myself and making sacrifices and working on that Sunday, it means I can save a little bit more and if those penalty rates weren’t on Sundays I would have to work an extra day, which would mean I wouldn’t be able to do as many units. So I wouldn’t be able to complete my studies in the same amount of time.
MR HARRIS: Do you know what your penalty rates are between Saturday and Sunday?
MS GRAGEDA: Yes, on Saturday it’s $23. On Sunday it’s $35.
MR HARRIS: So there’s $12 an hour difference, and that’s six and a half hours that you work, so $70-odd.
MR HARRIS: From your perspective you’re saying if the rates change - sorry, it’s 23 on Saturday, have I got that right?
MR HARRIS: Yes, and so that’s quite a big jump for the Sunday rate.
MR HARRIS: All right. Thanks for that.
MS GRAGEDA: I also volunteered for St John Ambulance for eight years. I was a cadet leader so I’m always trying to help the community, but because I’m working weekends now I can’t do that as well. So I’ve had to make a lot of sacrifices to try and improve myself and get a degree.
MR HARRIS: How far are you through the degree then?
MS GRAGEDA: So I’ve been doing parttime or just doing one or two units so I’ve completed one year.
MR HARRIS: I thought you said you went up there seven years ago.
MS GRAGEDA: Yes, so I’ve been doing one or two units and I had to stop so I could work because it was too hard. I was too tired and I couldn’t complete everything because it was just too stressful.
MR HARRIS: But the other four days a week, one unit is not four days a week, is it?
MS GRAGEDA: Yes, so I stopped working at one time. Like right now I’m working parttime.
MR HARRIS: Okay, but you’re still doing the same course you went up there to do?
MR HARRIS: Right. Did you want to do research outcomes? I think you mentioned, Gerard, some research outcomes?
MS FOX: Yes. Thank you, Chair. Sorry, are you finished?
MS FOX: I think what’s important is to look at the proposal to carve out the retail and hospitality industries in particular, and with the change to the Sunday rate. I guess that seems to reflect that the Productivity Commission accepts that there are arrangements in place for other industries such as nursing, emergency services, manufacturing, where there is a penalty rate which is similar to what we have in retail, whether it be 50 per cent or a hundred per cent in various awards, depending on the structure, that are a fair match between the inconvenience experienced by the worker but also the expectations of consumers, and there is an expectation that emergency services operate 24 hours a day, nursing does, et cetera.
It’s difficult then to see the logic that somehow retail and hospitality is different in that those inconveniences and those expectations of consumers are somehow unique or different. I think as Gerard went to, the Victorian award prior to award modernisation had a Sunday rate of 200 per cent. That’s a State that has had Sunday trading nearly for 20 years. So I think it’s not a new experience that consumers go out and shop on Sundays. It’s not a new experience that retail workers work on Sundays, and they have had that same rate of pay of 200 per cent.
It, I think, also is interesting to look at the research, which our SDA submission does go to. In particular, if I can just draw your attention to some of the key findings which I think again tend to contradict the Productivity Commission’s findings about night time work being the biggest inconvenience or the biggest impact on health, I think is where the focus of the Productivity Commission seems to be.
I note the evidence of Associate Professor Lyn Craig. We also refer to evidence and research done by Associate Professor Sara Charlesworth. Also Dan Woodman from Melbourne University and various others, and I think what is clear in that evidence which we’ve put forward and has been tested in two cases now before the Industrial Relations Commission is that Sunday is the least usual and the least popular day on which to work.
I think when we go to putting in further submissions that are due next week to the Productivity Commission we’ll be providing more detail about some of the statistical analysis that the Commission has relied on versus the work of these professors in these areas, which for us clearly highlights that Sunday is the biggest day of inconvenience and it’s not only the health impacts, it’s the social impacts: the impact on family; the impact on older family members; it’s the most destruction to - family time, spouse, children and family and friends happens on a Sunday. Time spent with others is even more negatively affected on a Sunday than it is on a Saturday and that is the findings of the research done by Professor Lyn Craig in that regard.
It’s also interesting to note Professor Lyn Craig’s research in that the child and father play in physical care is also highest on a Sunday, so that’s an important day for fathers as well. If we then look to other research of Professor Lyndall Strazdins’, weekend disruption again to the family, social and community engagements; and I think as Jhoana said, her social and community engagement in being a St John’s Ambulance volunteer has all but disappeared because of the requirement that she needs to fulfil to work on Sundays to meet her financial obligations and continue to study.
Also, we look at Dan Woodman and I think again that is useful when looking at the impact of working on weekends for students, and the need to try and manage the needs of study which are quite high. I think architecture is one that has some strong demands on time and ability to be successful in completing that degree, but being able to sustain yourself and pay your rent, that’s not an option to just rely on the family income as such.
I think Jhoana has gone to that point about the impact that had on her family if the family unit has to just be the sole provider of that income. She had to go out and make sure all the needs of the family were met; her sisters, her brother and her parents. She has to take on some responsibility in that and work to sustain that. She has moved from her home to Canberra to do that, as well. They’re real issues for people working in retail and students in particular.
I think from our point of view there is a clear difference in Sunday work and I think the evening work - and we acknowledge the evidence filed by those experts in those areas will show that night work is an issue. We’re not saying that that’s not at all and there is mental and physical health impacts of working nights, rotating rosters and shifts, et cetera, but it cannot understate the impact Sunday work has on family, community, health and social impacts. If there are any questions in regard to some of that evidence, but it is contained in our submission and we would like to   
(Proceedings interrupted)
MR HARRIS: I suspect someone is broadcasting outside and we’re picking it up. I’ll go on. In our draft report, we used what I consider to be an example. Every individual example is going to appear to be an extreme case because we’re talking here about the possibility of shifting the price paid for Sunday work. In our report, we did use the example of a pharmacy assistant and their rate of additional compensation on Sunday leading to a position where the shop assistant could be paid more than the pharmacist   
(Proceedings interrupted)
MR HARRIS: We should turn off the broadcast if that’s going to be the case, I think. Anyway, I’ll keep going. Did you read that?
MS FOX: Yes.
MR HARRIS: Did you note the pay level and the comparison with the trained pharmacist and the shop assistant? Again I’m not going to rely on individual cases. I understand why Jhoana is here and we’re not making our proposition based around individual cases, but I was wondering whether you had a response to that.
MS FOX: Certainly. I think it goes back to the issue of the takehome pay. The pharmacy assistant is not paid the same as a pharmacist when you look at their takehome pay.
MR HARRIS: Their total weekly   
MS FOX: That’s right. Total weekly earnings. Absolutely.
MR HARRIS: In terms of additional hours, we put forward an argument which suggested - and there is reasonable backing for this in our view, but I’d like to get your response to it - that if the pay level varies and so the Sunday rate becomes more like the Saturday rate, there will be the opportunity for additional hours for those businesses that only operate parttime on Sunday, for example. What is your union’s response to that?
MS FOX: The reality is trade hours have been extended. I come from Victoria, so I guess I have that hat on when I’m responding, but the trade hours in Victoria and Sunday work has not lead to an increase in the numbers of people hired. It hasn’t.
MR HARRIS: Not the numbers of people. The hours of work. Definitionally, if you worked, you had no time available after 12.00, for example. If a premises then opens for longer, until 4 o’clock in the afternoon, there are four extra hours for some employee to work or for an additional employee to be employed for that period. Do you not see any value in that?
MR DWYER: That’s based on a premise that a number of businesses are actually choosing to close at 12.00. I guess our union position is that that is actually not borne out substantially in the real word. We would cite, for example, the Easter period just passed. There was a campaign by some organisations about promoting this issue of penalty rates on weekends and putting up signs to say you’re closed because there is a problem. So we had people in the field just having a look at how that was operating and I, myself, went to a couple of centres in Sydney which I think are quite representative in terms of - one was Ryde. You’ve got Chatswood, as well. We didn’t see that played out.
What we saw was extremely active businesses on those days and I’d note that, for example, Easter Saturday is not just a Sunday rate; it’s a public holiday rate of 250 per cent. Enormous commercial activity. We would say that the commercial activity is to be endorsed, but the employees giving up that Easter Saturday are also entitled to fair compensation and where we’re at at the moment, be it that or the Sunday, the employees were getting what we would say is fair and reasonable compensation for that work and we could see no inhibition on commercial activity.
That is borne out Sunday after Sunday after Sunday in the suburbs of our cities in terms of be it hospitality, where I guess we can be consumers or participants in our trade in retail, where they are important trading days and there is an enormous amount of commercial activity. The stores and outlets did not close in that campaign on Easter Sunday by and large. All we saw was enhanced commercial activity. A number of retailers shared with me in the months after that, that that Easter period was actually better than Christmas and that’s good. That means there are more hours there, but what we’d say is that the hours - some sort of constraint on hours after midday on Sunday or after midday on Saturday, we don’t see that by and large in the commercial centres across this country.

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