2015 Productivity Commission Inquiry and the threat to penalty rates

The workplace relations agenda of the Federal Liberal government has become clear with the start of the Productivity Commission’s Inquiry into “all aspects” of our working conditions.  Our rights at work are under attack. Penalty rates are under attack.

What are penalty rates and why are they paid?

For decades penalty rates have been paid to employees like nurses to compensate for working during times which are inconvenient and anti-social.

They are generally paid to employees who work evenings, nights (also referred to as shift allowances) weekends, or public holidays.

NSW nurses usually get a 12.5% loading for afternoon shifts and 15% for night shifts. Saturday work is generally paid at a 50% loading, and Sunday a 75% loading.

For example an Aged Care RN thereafter, whose hourly rate was normally $36.07, will receive $63.12 for each hour worked on a Sunday (i.e. $36.07 x 1.75 = $63.12).


What is the Productivity Commission and why is it reviewing how I am paid?

The Productivity Commission is a Federal Government body whose main role is to “hold inquiries and report to” the Federal Treasurer (Joe Hockey) “about matters relating to industry, industry development and productivity”. In December 2014 Treasurer Hockey commissioned the Productivity Commission to “undertake an inquiry into the workplace relations framework”.

The Productivity Commission has been given a ‘blank sheet of paper’ to recommend a complete rewrite of the laws and industrial awards and agreements that protect our wages and conditions and govern the rules about how they are negotiated.


Why should I be worried about what the Productivity Commission will recommend?

The Productivity Commission has recommended cuts to penalty rates, the mimimum wage and encouraged individual contracts in the past.

The Federal Government knows that it is likely to do so again.

The Government’s aim is to commission a so-called ‘independent’ report that they will subsequently use to ‘justify’ changing the workplace laws to favour more employer ‘flexibility’.


So why are my penalty rates in particular under threat?

Employers in hospitality and retail have made their intentions clear in the media over the last 6 months: they want penalty rates reduced and ultimately abolished. They argue that we are a 24 hour 7 day society and that everyone expects to work and receive services every hour of the day. Therefore those who work Sundays and nights are nothing special and are undeserving of penalty rates. It is ironic that the main proponents of these arguments are Liberal party politicians and advocates for big business on massive salaries who do not work shift work.

If these employers win the media war, your penalties face the domino effect.

Today it might be the Sunday coffee barista’s family’s livelihood that’s under attack, but next year it could easily be nurses.


What is the Productivity Commission actually proposing?

The Productivity Commission must release a draft Report in June/July 2015 with the Final Report to Government due 30 November 2015.

Its five discussion papers devote a whole section to penalty rates and invite ‘submissions’ on questions including:

What do the experiences of countries like New Zealand, the U.K. and the U.S. – which generally do not require penalty rates for weekends – suggest about the impacts of penalty rates? and

What are the economic effects of current and alternative penalty rate arrangements on business profitability, prices, sales, opening hours, choice of employment type, rostering….?”


I am a nurse at an aged care facility and I have an Agreement that includes penalty rates – aren’t I protected?

No – not if the Government changes the industrial laws.

The Federal Government has given the Productivity Commission a license for recommending wholesale change of Australia’s industrial laws. Under WorkChoices the Federal Liberal Government passed laws overriding many existing awards and agreements conditions with the stroke of a pen. Relying on Productivity Commission recommendations, it is highly likely that they would do the same again with many of your agreement provisions, including your penalty rates.

Don’t forget, the Federal Liberal National government scrapped the aged care pay supplement as soon as it won Government in 2013.


What can we do to ensure we retain our penalty rates?

We can’t save our penalty rates on our own, but together we can.  This is an attack on our rights, our incomes, our livelihood and our families. The time to act is now!


Ask your colleagues to join the NSWNMA online now. Stronger together: The more nurses in the Union, the better chance you have of protecting your rights.

Join over 77,000 nurses and midwives in NSW by becoming a valued member today.

You’ll automatically become a member of the Australian Nursing and Midwifery Federation