Ho-Hum – Our Assessment of “Landmark” Retail Deal
Steve Champion, Director of Employee Relations Strategies reviews a widely reported framework enterprise agreement in the Retail sector - and can't feel excited about it.
Much press attention was given to a recently negotiated ‘template’ agreement in South Australia, between Business SA, and the South Australian Branch of the SDA.
Employers have reportedly welcomed the “removal” of weekend penalties, and Bill Shorten, leader of the Federal Labor Opposition, has proclaimed the deal as a sign that its Fair Work Act legislation as working.
Some of our own clients have called to ask us whether we are getting ready for a new wave of enterprise agreements (we have a substantial business in helping employers negotiate and implement enterprise agreements and operate this www.enterprisebargaining.com.au website).
Our Summation of the Deal?
Ho hum.
Ho hum because the deal is at best only an incremental improvement – and possibly not at all - on many existing Retail sector EBAs, which have negotiated enterprise agreements with a 9% ‘buy-out’ of the 200% Sunday penalty – well, only a reduction to 150% actually - and removal of the 25% Saturday penalty. Public holiday penalties are also reduced to 200% under some of these deals.
Whilst this new deal might possibly sound a better deal to some with an 8% buyout loaded into the base rates, our experience in modelling the impact of penalty rates is that most of the retail employers already under enterprise agreements with the SDA are actually paying more to buy-out the effect of the penalties than what it would otherwise cost them under the award.
This is because they have previously had to tighten their rosters to minimise the impact of penalty rates, perhaps through use of casuals – and casual rates are only reduced by 25% on Sundays under the South Australian deal.
So whilst the new deal will allow them to roster more employees on Sundays, it won’t necessarily save them any money.
Whilst we welcome any change in union position on penalty rates, our general view is this deal represents no real change in the height of the bar employers need to hurdle. Even if it does, employers need to convince the Fair Work Commission that all employees are better off overall than the award.
Why The Fuss?
Let’s be real about the deal. It represents no real change.
So we are left wondering - why did everyone get so excited?
