Retailers are not only asking Fair Work Australia to halve penalty rates, they also want online retailers to be included in the general retail award as part of the latest review.
Fair Work Australia is calling for submissions over the next five weeks, ahead of its upcoming review of award rates and restrictions, in which hospitality and retail industries will be the first industries to be appraised.
The review comes at a time when Australian retailers are desperately seeking relief, having been hit hard by conservative consumer spending, online competition and a volatile industry landscape. Aside from the ongoing GST debate, a retailer’s biggest pain point is maintaining adequate staff numbers while keeping overheads down.
Consumers now expect to be able to place orders 24 hours a day thanks to rise in online shopping, but this is causing no end of grief for bricks-and-mortar retailers, who are required to pay sales staff hefty penalty rates outside of normal trading hours.
The Fair Work review represents an opportunity for these retailers to make a case for the definition of ‘normal trading hours’, penalty rates and other aspects of the agreement to be updated, potentially easing the pressure on already flagging profit margins.
Taking advantage of this possibility, the Australian Retailers Association has made a submission that highlights four key points of contention. Somewhat unsurprisingly, these are penalty rates, part-time flexibility, online retail and training sessions.
Penalty Rate Caps
As it stands, penalty rates are currently set at 100 percent of the award’s base rate, however the ARA would like this significantly altered.
“We’d like to see that capped at 50 percent,” Russell Zimmerman, Executive Chairman of the ARA told SmartCompany. This would include both Saturday and Sunday rates, allowing traditional retailers to stay open right through the weekend and more easily compete with online rivals.
Depending on the online retail venture, many staff won’t ever be faced with getting paid the award rate, as they tend to work at a desk, perhaps writing emails and responding to the odd telephone call – however, there are still positions in many of these businesses where the retail award rates may apply.
“If you extend the storefront situation from the storeman to the warehouse, in retail you have people working in store rooms as well, just under different sections of the same award,” Zimmerman said.
Shorter Training Shifts
Under the current agreement, retailers can only invite staff into training sessions that are a minimum of three hours. Instead, they say that minimum should be reduced to 90 minutes. This will allow retailers much greater freedom when planning these kinds of training initiatives, without the fuss of being locked into unnecessarily long training sessions.
“What we’ve seen is that … you have a lot of businesses that just won’t train anymore because the shift is too long and they can’t afford it,” Zimmerman said.
Now that there are more part-time workers than ever before in the industry, the ARA is hoping Fair Work Australia will rule that retailers will not be forced to pay penalty rates every time a part-time staff members works more than their rostered hours.
“Is there’s going to be a push here [for more part-time workers], we’d just like to see some flexibility,” said Zimmerman.
The Double-edged Sword of Rate Reductions
While the ARA can easily justify its stance on the issue of penalty rates and introducing flexibility into staffing schedules, petitioning Fair Work Australia to make these changes doesn’t come without a certain amount of backlash.
Certainly existing staff members that would be faced with a potential loss of income due to these changes would not see the proposal in a favourable light, especially with an increasing number of Australians turning to multiple part-time jobs in order to make ends meet. It is these constituents of the retail industry that consumers tend to sympathise with most, perhaps because so many have worked the sales floor themselves at some point in their lives.
Essentially, by making these demands the ARA may end up alienating Australian consumers even further, putting still greater pressure on struggling bricks-and-mortar retailers.
It won’t be long before we discover whether the ARA is successful in this most recent petition. In the meantime, do you think that making changes to the award rates and penalty system will turn the ship around for floundering Australian retailers?