The Senate Standing Committee on Education, Employment and Workplace Relations is currently considering a Bill that revisits the ill-fated Work Choices legislation. While Opposition Leader Tony Abbott maintains that Work Choices is 'dead, buried and cremated', Independent Senator Nick Xenophon is advocating a position that adopts a central feature of that legislation.
The Fair Work Amendment (Small Business-Penalty Rates Exemption) Bill 2012, introduced by Xenophon on 16 August 2012, proposes a fundamental change to the national award safety net system. If enacted, it would remove penalty rates from the awards covering small businesses in the restaurant, catering and retail industries and would reduce the rights and incomes of many low paid and vulnerable workers.
The rationale is that these pay cuts would lead to increased employment in the firms covered by the exemption.
This kind of rationale was the basis of Work Choices, which sought to cut the costs of employment by lowering safety nets and exposing workers to more labour market forces. It restricted collective bargaining, excluded workers in small businesses from unfair dismissal rights, removed 'needs' from the minimum wage-setting criteria, and permitted the removal of established rights, such as penalty rates, from the award safety net.
The burden of job creation thus fell on the low paid workers and their families. In effect, these vulnerable workers and families were told that their wages and conditions of employment were the reason why unemployed workers and families were suffering and that they had bear the cost.
The Australian Catholic Bishops issued a Statement in November 2005 expressing concern about aspects of Work Choices, including the prospect that 'many workers, especially the poor and vulnerable, may be placed in a situation where they will be required to bargain away some of their entitlements'. In particular they referred to the risk to penalty rates, and called for the protection of these entitlements.
The current bill's proposed loss of penalty rates would have a major impact on many low paid workers and their families. The National Minimum Wage and other award rates already provide only poverty wages. Workers who rely on penalty rates to help make ends meet would be left without any compensation.
Penalty rates compensate for working in unsocial hours. Work on evenings, nights, weekends and public holidays impacts a wide range of personal and family arrangements. The bill proposes treating the restaurant, catering and retail industries differently from other industries that operate during the same time