Friday, August 28, 2009

Modern Awards Won’t Cost Jobs.

The process of modernizing Australia’s industrial awards system has been important for two reasons. Firstly, the old system had become cumbersome and complex, growing over the years into a maze of thousands of awards with different terms and conditions in different jurisdictions. Reducing the overall number of awards and creating greater uniformity will provide the benefit of a system which is easier to understand and navigate. Secondly, with the demise of “Work Choices” and the associated move away from individual contracts, awards will become even more important as the safety net for employment conditions and the baseline for negotiations.

For those reasons, the reform process is essential, but at the same time there have been some bumps along the road. Most notably, employers in some sectors have held legitimate concerns that in the process of creating consistency some labour costs would increase. For example, in the retail sector, employees in some states have been entitled to double time on Sundays, while others have only received time and a half. The new award is to put all employees in the sector on double time for Sundays. While it can be seen as fair to workers, it means some employers will have to pay more. They argue that, especially at this time of economic weakness, it will cost jobs.

Similar concerns have been raised by representatives of the horticulture sector, pharmacies, and call centres. All have claimed that the nature of their businesses dictates that they operate seven days a week, and that added costs for employing workers on a Sunday cannot easily be recouped from customers. In such cases, it can easily be argued that wages should be based on the number of hours worked, not on when those hours are worked. After all, the merchandise in the shop is not normally sold with an additional markup on Sundays, and if it was, customers would simply stay away.

However, while it is true that modern life is a twenty four hours a day, seven days a week proposition, many people still believe that having to work on a Sunday, or at odd hours of the day, should be compensated with a better rate of pay. It is still the accepted custom in our way of life that Sunday is a special day. It is the designated day of rest, and an important day for families. Surely that in itself is something which has a commercial value, and which should be recognized in the form of a better rate of pay.

Despite all the concerns, employers have recognized the need for the modernization process to take place. Some have even accepted that the process will result in some increased labour costs. Rather than opposing the changes outright, retailers have called for a two year moratorium on the changes until the expected economic recovery kicks in. By then economic growth will be picking up and cost of the changes will be more easily accommodated.

Responding to these concerns, Industrial Relations Minister Julia Gillard has requested the Industrial Relations Commission to phase in any changes which will impose an additional cost on employers over a five year period. While it is not the moratorium sought by the Retailers Association, it effectively addresses those concerns, while also ensuring that, over time, workers will receive the benefits they have been promised. Rather than costing jobs, the fact is that well paid workers can afford to be consumers, and that is a fundamental requirement in a consumer driven economy.

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