New research from the University of South Australia suggests that people who work late at night, early in the morning and on weekends are worse off than those who work between 8am and 6pm on weekdays. So should they be paid more for their trouble?

According to the university’s Australian Work and Life Index 2014, most of us work Monday to Friday between 8am and 6pm. Report authors Natalie Skinner and Barbara Pocock conclude:

“[T]hose who work unsocial hours have worse work-life interference than those who do not. Working on weekends is worse for worklife interference that [sic] working weekdays. Furthermore, working on a Sunday is associated with worse work-life interference that [sic] on Saturdays or week days. Working nights is also associated with worse work-life interference.”

The Australian employment relations system has included penalty rates for around 100 years. And the argument at the core of the penalty rates debate has also remained largely unchanged — the recognition that people are being asked to work unsociable hours outside the norm to meet a never-ending demand for services versus the impacts of fairly meeting such demands for employers and businesses as a whole.

In 1919, when setting the wage standards for employees in the gas industry, the now-defunct Commonwealth Conciliation and Arbitration Commission held that penalty rates for work on Sundays were intended as compensation for working unsociable hours. In that case, the commission also found that prescribed penalty rates acted as a disincentive for employers to require employees to work on weekends, traditionally days of rest.

This concept of providing compensation for working unsociable hours was revisited in 1950, when the New South Wales Industrial Relations Commission (with respect to engine drivers) noted that penalty rates were required to compensate for the disturbance to an employee’s family and social life.

Accordingly, over time, penalty rates have been introduced throughout most industries and have become a fixture in the Australian employment relations system.

In spite of these advances, employer groups such as Australian Industry Group and the Australian Chamber of Commerce and Industry are still arguing that the concept of penalty rates is no longer relevant. They argue that penalty rates impinge on productivity and over-burden employers.

“If the employer groups are successful and the price on inconvenience is deleted across several industries, history tells us that the savings will not be passed on to consumers.”

There are many industries where employees are forced to work nights and weekends, including emergency services, manufacturing and road maintenance. Yet the reality is that it is the lowest-paid sector of hospitality staff who are at the front line of the penalty rates war: people who are typically required to work nights and weekends — and often for low remuneration — while the rest of Australia is enjoying time with their families and friends.

With the introduction of the modern award system in 2009, Fair Work Australia invited submissions from interested parties, including employer representatives and trade unions, about what should be included in industrial awards.

Restaurant and Catering Australia, the national industry association for restaurant and catering businesses, argued that penalty rates for weekend and night work ought to be wound back significantly. Fair Work Australia rejected the association’s submissions, saying that such an approach “ignores the inconvenience and disability associated with work at nights and on weekends”. It further found that winding back, or eliminating, penalty rates for hospitality workers would give the operational requirements of employers absolute primacy over the needs of typically low-paid employees.

The Australian Council of Trade Unions estimates that 4.5 million Australians rely on penalty rates as part of their income and that removing such a significant amount of income would actually harm the economy, as it would likely reduce consumerism.

In his book, What Money Can’t Buy, Michael Sandel, an American political philosopher and Professor of Government at Harvard, writes about the marketisation of existence and how applying a penalty for inconvenience can simply be viewed as a fee to access a service one ordinarily would not be able to access.

Skinner and Pocock conclude that penalty rates are justified:

“Based on this analysis there is a case for paying workers a premium for Sunday work and for weekend and evening work more generally, given the poorer work-life interference associated with Sunday work.”

However, now restaurants and retail shops are leading the fight to have penalty rates removed from their industries. As the most recognisable faces of the penalty rates debate, the retail and hospitality industries are the battleground for what is likely a much broader employment relations agenda: if the price of inconvenience is removed from these two industries, others will likely follow.

Employer groups such as Australian Industry Group and the Australian Chamber of Commerce and Industry see this fight as an investment in the broader future of employment relations and the removal of regulations around working hours across all industries.

If the employer groups are successful and the price on inconvenience is deleted across several industries, history tells us that the savings will not be passed on to consumers.

Rather, in the short term it will mean less income for what are already low-income workers and in the long term, an erosion of the work/life balance that traditional weekends provide many Australians.

Peter Fray

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