Sunday rate cuts to increase casualisation of the workforce

The impact of the Fair Work Commission’s recent decision to cut Sunday penalty rates will be felt acutely by the hundreds of thousands of workers who will have their pay slashed by up to $3400 each year.

The decision would also reverberate across the economy – increasing casualisation and the gender pay gap and affecting enterprise bargaining.

According to the Mckell Institute report:

• Up to 680,000 award-reliant retail, hospitality and fast food employees could be directly affected by the decision
• Affected employees working eight hour shifts will lose at least $72.90 each week
• Because 55 per cent of affected workers are female, the decision will worsen the gender pay gap
• Full time and part time workers are the most disadvantaged, meaning proposed changes will incentivise further casualisation of the workforce
• Enterprise bargaining will be affected by the “economy-wide devaluation of Sunday rates”, with some retail employees already looking at renegotiating agreements to factor in proposed changes

Report author and McKell Institute policy manager Edward Cavanough told Workplace Express (subscription only) that the decision is more likely to cost jobs than to create them.

“We think that the impact on job creation will be marginal, and possibly negative, as the FWC decision does not reflect the fact that by reducing the pay of low-income earners, discretionary spending is the first to go.”

Read more:

• The Impact of the Fair Work Commission’s February 23 Sunday Penalty Rates Decision (McKell Institute)
• Penalty rate cuts to hasten “mass casualisation” of Australian workforce (SMH)
• Penalty rate cuts could backfire on business (ABC)
• Employers’ pyrrhic penalty rates win reflects self-defeating economics (SMH)