Synopsis
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.
Introduction
Penalty rates have been a significant aspect of the Australian industrial relations system for over …show more content…
Even though the labour market and the concept of weekend working have changed over time, penalty rates are said to still be protecting the Australian weekend (The McKell Institute 2015a). In order to enhance equity and the justice of economic rewards, employees are paid time-and-a-half the standard hourly rate on Saturday and double-time rate on Sunday until now.
The Productivity Commission (PC) recently recommended cutting Sunday penalty rates as they stated that the demand for consumer services has grown substantially and the ‘high’ penalty rates on Sunday appears to be unsustainable, especially for small businesses. They proposed that the reduction in Sunday penalty rates will stimulate job creation for both existing and potential employees. While there is an instant drop in hourly rate, employees have the opportunity to receive more work hours and shifts, which effectively increases their overall earnings (Lewis 2014). It is also argued that the flat penalty rates at time-and-a-half for both Saturday and Sunday will enable small businesses to be more competitive as they achieve more adequate gross profit margin. When the input cost is lower, the consumers also benefit a lot more since they can gain more access to services on the weekend at a lower price. The focus of this recommendation …show more content…
This process requires a detailed assessment of each individual business’ finance, because not all small businesses are unable to afford Sunday penalty rates. This strategy should come with eligibility criteria so that the government can determine which business needs assistance and to what extent they can assist the business. This can be seen as government’s wage subsidies, but instead of the government spending their own budget to assist businesses, they can use the tax paid by the business to efficiently enhance the benefits of both the employees and
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.
Introduction
Penalty rates have been a significant aspect of the Australian industrial relations system for over …show more content…
Even though the labour market and the concept of weekend working have changed over time, penalty rates are said to still be protecting the Australian weekend (The McKell Institute 2015a). In order to enhance equity and the justice of economic rewards, employees are paid time-and-a-half the standard hourly rate on Saturday and double-time rate on Sunday until now.
The Productivity Commission (PC) recently recommended cutting Sunday penalty rates as they stated that the demand for consumer services has grown substantially and the ‘high’ penalty rates on Sunday appears to be unsustainable, especially for small businesses. They proposed that the reduction in Sunday penalty rates will stimulate job creation for both existing and potential employees. While there is an instant drop in hourly rate, employees have the opportunity to receive more work hours and shifts, which effectively increases their overall earnings (Lewis 2014). It is also argued that the flat penalty rates at time-and-a-half for both Saturday and Sunday will enable small businesses to be more competitive as they achieve more adequate gross profit margin. When the input cost is lower, the consumers also benefit a lot more since they can gain more access to services on the weekend at a lower price. The focus of this recommendation …show more content…
This process requires a detailed assessment of each individual business’ finance, because not all small businesses are unable to afford Sunday penalty rates. This strategy should come with eligibility criteria so that the government can determine which business needs assistance and to what extent they can assist the business. This can be seen as government’s wage subsidies, but instead of the government spending their own budget to assist businesses, they can use the tax paid by the business to efficiently enhance the benefits of both the employees and