The federal government has intervened in a debate over penalty rates, warning that a retailer-backed proposal could leave thousands of workers worse off.
The Australian Retailers Association (ARA) has proposed allowing some retail employees to forgo penalty rates, overtime, and other entitlements in exchange for a 25 per cent pay rise. Major retailers, including Coles and Woolworths, support the move, which would apply to staff in level four to six roles earning between $53,670 and $61,958 annually.
Employment Minister Murray Watt opposes the plan, arguing it could strip protections from 353,200 retail workers covered by the award. He emphasised that enterprise bargaining is the appropriate avenue for such negotiations, not changes to the award system.
The Shop, Distributive and Allied Employees’ Association (SDA) has called the proposal an attack on workers’ rights, arguing that a 25 per cent pay rise does not fairly compensate for the loss of entitlements.
The ARA contends the current award is too rigid, limiting flexibility and efficiency. ARA’s chief industry officer, Fleur Brown, refuted claims that penalty rates and paid breaks would be removed, stating that affected employees could opt in voluntarily.
The proposal also includes changes allowing split shifts over four days instead of five and eliminating mandatory lunch breaks in favour of finishing early. Watt warned this could set a precedent for other industries to reduce penalty rates.
This intervention is part of broader government scrutiny of the retail sector, including a recent parliamentary inquiry into supermarket price gouging. The Fair Work Commission will review the matter in hearings next month.
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