In Payroll & Employment by Clyde Mooney

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The Productivity Commission’s enquiry into Workplace Relations is complete, with big wins for the hospitality industry now in the hands of Federal Government.

The enquiry was commissioned by the former Treasurer, and sought to assess the performance of the Workplace Relations framework, focusing on “key social and economic indicators” for Australia and its people. The final report was released just prior to Christmas.

It mandated particular assessment of unemployment and job creation, and flexibility in times of change.

These are issues that greatly affect industries such as hospitality, employing larger numbers of casual and part-time workers, and the Commission’s recommendations are largely in line with requests by industry. The Australian Hotels Association (AHA) National office made extensive submissions to the Commission – many have which have been recognised in the report.

Arguably the most controversial recommendation, and the one that has already drawn the ire of the likes of the Australian Council of Trade Unions, suggests dropping Sunday pay rates to be the same as Saturdays.

While the Commission maintains that penalty rates “have a legitimate role in compensating employees for working long hours or at asocial times”, it brands higher Sunday rates as out-of-date with “changing consumer preferences” and says they are problematic and inconsistent across industries.

The recommended changes to penalty rates would not apply to overtime, night shifts or shift loadings, or workers in nursing, teaching or emergency services.

The report also suggested “moderate and incremental reforms” to the system of unfair dismissal. Most significantly, these changes would eliminate the Small Business Fair Dismissal Code in favour of some key changes.

The Commission found the Code provided for a “false sense of security” and advises amendments to:

  • Prioritise substance over procedure – reducing or eliminating occasion where a dismissed employee may receive compensation because procedural errors have trumped what would otherwise be a valid dismissal
  • Allow for upfront assessment as to the validity of a dismissal
  • Revise the fee structures for lodgers of complaints
  • Remove the emphasis on reinstatement of workers, as rarely achieved and often “would not be desirable”

The business of Public Holidays also made the report, addressing the inconsistency between States and the burden on business to shoulder the cost of the celebration.

AHA CEO Stephen Ferguson told PubTIC the Association is pleased with the report, which provides a platform for a system that enables hospitality to grow business, employment and service standards.

Stephen Ferguson, AHA National CEO

Stephen Ferguson, AHA National CEO

“What is impressive about the report is the consistent call for common sense to be favoured over procedure, especially in areas such as dismissals, where an employer might be forced to pay compensation due to a procedural lapse despite an employee being found guilty of misconduct.

“Providing a State public holiday for a sporting contest might be politically popular, but when businesses have to carry the cost of such decisions, it’s clearly not fair.”

While ultimately the decision on whether or not to adopt the Productivity Commission’s recommendations is up to the Fair Work Commission, the Federal Government will play a large role in determining whether or not the changes become an issue of debate.

Upon releasing the report publicly, the aptly named Employment Minister Michaelia Cash distanced the Turnbull Government from responsibility.

“The government has no plans to change penalty rates … [they] are set by the independent Fair Work Commission,” said Senator Cash.