There are new rules in the retail industry. Sunday penalty rates have dropped, casual rates are different; the discussion continues and the polarisation increases. Russell Zimmerman, Executive Director of the Australian Retailers Association gives us an update on the current state of play.
Over the past few months much has been written regarding employment law issues, and I would like to update retailers on the work ARA has been doing over the past few months.
Judicial Review of Penalty Rates Decision
Both United Voice and the SDA have applied for judicial review of the Penalty Rates Decision.
Neither the SDA nor United Voice applied for a stay of the decision, meaning the first phase of the reduction commenced on 1 July 2017.
As a retailer, you are within your rights to reduce the Sunday penalty rates to 195% for your employees.
The SDA and United Voice applied to have their applications heard together, and this has been granted by the Federal Court. The SDA and United Voice also both asked that the matter be expedited by the Court. The Court agreed to this, and the case was heard on 26, 27 and 28 September, 2017.
The unions filed their joint outline of submissions on 14 July 2017 identifying three grounds (with additional sub-grounds) of alleged error:
1. The Material Change Ground
The unions assert the Commission erred in failing to determine that, for a change to be made, the employers needed to demonstrate there had been a material change in circumstances since the making of the awards.
2. The Fair and Relevant Ground
The unions assert the Commission erred in that it sought to define ‘relevant’ in the context of a fair and relevant minimum safety net, when its task was limited to an assessment of the matters it needed to take into account when establishing whether the awards provided a fair and relevant minimum safety net.
3. The Low Paid Grounds
The SDA lists a number of grounds under this heading, which all essentially relate to an alleged error by the Commission to consider, or properly consider, the needs of the low-paid. The unions have focused on a part of the Decision where the Commission said that the needs of the low-paid are best served through increases to minimum wages. The unions say this confirms the Commission did not consider the needs of the low-paid to be a significant factor.
The ARA is confident the unions’ application will be rejected by the Court.
Casual Common Issue
On 5 July 2017 a Full Bench of the Commission issued its decision in the Casual Employment Common Issue. This matter involved an application by the ACTU and other union parties to:
1. include a casual conversion clause in about 88 modern awards;
2. restrict the engagement of new casual employees;
3. restrict the engagement of labour hire workers;
4. increase the minimum engagement of casual employees to four hours.
The Commission rejected the union’s claims save for the casual conversion claim. As a result, a casual conversion clause will be inserted into the General Retail Industry Award 2010 (GRIA) and other awards relevant to the industry. Importantly, however, the clause proposed to be inserted by the Full Bench is much more reasonable than that proposed by the ACTU and unions.
A most disappointing aspect of the decision, but one which was not unexpected, is that the Full Bench confirmed that casual employees under the GRIA are entitled to overtime where they work in excess of 38 hours in a week, in excess of daily hours limits and outside of the span of ordinary hours. ARA was pleased that the unions’ request for an increase in the minimum engagement of casual employees was defeated.
It is important to note that these changes have not commenced, as the Commission is still seeking input from parties in relation to wording of the clauses.
Public holidays
The SDA has applied to have non-working day provisions inserted into the GRIA (and other awards). The SDA evidence consists of witness statements from retail employees who talk about ‘missing out’ on public holiday benefits because of their working patterns. ARA defended the case on the following grounds:
• the cost of the claim to employers and the likely impact of that additional cost on employment;
• the absence of necessity for the change;
• the statements of seven retail workers cannot be generalised to the retail workforce; and
• the Public Holidays Test Case took place under a vastly different statutory regime in terms of both industrial relations and public holiday regulation.
Final hearings were held in late July, with additional written submissions filed in August. We expect a decision will be handed down in late September or early October.
Casual Saturday and evening penalty rates
The Penalty Rates Decision included an observation from the Full Bench that the current combined Saturday penalty and loading for casual employees under the GRIA (35%) appeared to be an anomaly, and that given part-time employees are entitled to a 25% penalty, the combined penalty and loading for casual employees would more appropriately be 50%.
The SDA already had an application before the Casual Common Issues Full Bench to increase the Saturday combined penalty and loading, and the weekday evening combined penalty and loading, to 50%.
The Full Bench has determined that this matter will be dealt with by the Penalty Rates Full Bench. The SDA and ARA agreed that the matter should be deferred until after the Judicial Review of the Penalty Rates Decision, and the Full Bench has allowed this. It is expected the application will be dealt with in the first half of 2018.
The ARA is active in advancing the interests of the industry in all areas of employment law. ARA has also been involved in the Family & Domestic Violence Leave Common Issue and appeared before the Xenophon Inquiry on 24 August. This inquiry was set up to consider enterprise bargaining in the retail and fast food industries, with the following terms of reference:
1. Claims that many employees working for large employers receive lower penalty rates under their enterprise agreements on weekends and public holidays than those set by the relevant modern award, giving those employers a competitive advantage over smaller businesses that pay award rates.
2. The operation, application and effectiveness of the Better Off Overall Test (BOOT) for enterprise agreements made under the Fair Work Act 2009.
3. The desirability of amending the Fair Work Act 2009 to ensure that enterprise agreements do not contain terms that specify penalty rates which are lower than the respective modern award; and the provisions of the Fair Work Amendment (Pay Protection) Bill 2017.
The ARA strongly argued against any measures that would further impede enterprise bargaining in retail, citing the alarming fall in enterprise agreements being made in the industry since 2010.
