Retail and hospitality sectors wrestle with award modernisation

Retail and hospitality business groups are devoting huge resources to award modernisation, a process that could have a big impact on the employment costs of thousands of their members.

The Australian Industrial Relations Commission today kicks off consultations with employers and unions in key sectors on how best to proceed with the task of rationalising the web of different state-based awards that apply across the country into fewer, simpler national awards.

The stakes are arguably highest in retail and hospitality because of the high proportion of workers in those sectors whose wages and conditions are directly set by awards.

For business groups in the sector, the pressure is on to get the process right, but the need to balance the interests of all stakeholders and the complexity of the task mean it will not be easy.

Award modernisation is still in its early stages, but John Hart, chief executive of Restaurant & Catering Australia, estimates his organisation has already spent around $100,000 on the process.

“We have all our industrial relations advocates around the country and big slabs of two law firms working on it, as well as two teams of consultants working on labour market modelling and extensive consulting with our members, so it’s just extraordinary,” Hart says.

With many hospitality businesses operating under tight margins and more award-reliant workers than any other sector (upwards of 60%), the sector is at the front-line of award modernisation.

The goal of the process is to reduce the number and complexity of awards businesses and workers have to deal with without materially affecting wages and conditions overall.

For Hart and his staff, that has meant taking the eight, state-based mainstream awards, with all their historical differences and variations, and reducing them down to one draft award.

“It’s a very difficult balancing act we’ve got to work through,” Hart says. “There are so many different terms and conditions – 40-hour week in some states and not others, some have casual loading, there are different penalty rates – and they all have their own balance, but the battle is to make sure that is preserved.”

The Australian Retailers Association recently submitted its draft award to the commission. For the ARA, changing store opening hours in each state further complicates the process.

“Since de-regulating trading hours and internationalising product supply, the retail market has changed, and now consumers drive the market. A modern retail award must reflect the modern retail market, which requires flexibility and the current award is structured around fixed trading conditions,” ARA chief executive Richard Evans says.

But because of the need to balance the interests of employers and employees – unions are also participating heavily in the process, with the commission acting as the final umpire – simply doing away with penalty rates is not an option.

“The ARA’s recommendations recognise full-time employees, supporting the continuation of penalty rates within the context of a seven day, 24 hour trade period,” Evans says. “Consumers drive labour rates within retailing and it is imperative retailers have the flexibility required to meet modern consumer demand. However, the ARA does not support rogue retailers who don’t respect their staff or their compliance requirements and our submission maintains adequate protection for employees within the modern retail award.”

The various parts of the manufacturing sector are a third key focus of this first stage of award modernisation. The Australian Industry Group, the key group for the sector, is party to more than 100 awards set for reform

“This has been an enormous undertaking and this is only the first phase,” AIG chief executive Heather Ridout says. “The submission and accompanying draft award provisions represent the outcomes of months of negotiations with unions in several industries and a lot has been agreed.”

Related articles: