Is Penalty Rates Be A Fundamental Part Of The Safety Net For Employees?

1843 Words Oct 6th, 2016 8 Pages
Penalty rates as a fundamental part of the safety net for employees have recently been a huge subject of debates since the Productivity Commission called for Sunday rates to be brought into line with Saturday rates. That recommendation has a few positive aspects in term of promoting business growth and economic advancement, but it also has negative sides that potentially impair the benefits of the workers. This report therefore suggests the alternatives where the reforms of the cash economy and tax governance system will provide the same advantages without carrying the risk of impeding either the employee or the employer.
Penalty rates have been a significant aspect of the Australian industrial relations system for over a century (The McKell Institute 2015a). These additional remunerations are the economic incentive for employees in many industries to work at asocial times. In 2012, 2.4 million Australians are estimated to work on the weekend (The McKell Institute 2015b) and for many of these workers, penalty rates are an important part of their living wage. Any changes in penalty rates will impact their income and living standard. In the recent inquiry submitted to the government on November 30 2015, The Productivity Commission (PC) suggested the reduction in Sunday penalty rates to align with Saturday rates for the hospitality, entertainment, retail, restaurant and cafe (HERRC) industries (Productivity Commission 2015). It is argued that the benefits…

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