Penalty rate debate heats up

According to Federal Employment Minister, Senator the Hon Michaelia Cash, if Australia is to remain a globally competitive economy we have to ensure that our industrial relations systems and regulation can respond appropriately.

"Producers and consumers are discovering new ways to find each other and most of it is online. It is outside of that traditional employment relationship. As policy makers, we couldn't just regulate tomorrow as I don't think we understand yet what these new relationships are," she said.

"While the government is committed to maintaining a strong safety net, we need to acknowledge the inflexibility within current industrial relations system, the disincentives to employment and do what we can to change them, while at the same time having a conversation as Australians as to where the next industrial relations system is going to take us," she said.

Senator Cash was speaking at a recent Lander & Rogers client briefing session on the future of industrial relations in Australia. Senator Cash was joined by fellow panellists Wilhelm Harnisch, CEO of Master Builders Australia and Russell Zimmerman, Executive Director, Australian Retailers Association.

Speaking about how Australia's industrial relations system can help combat disincentives to employment, Zimmerman said that penalty rates for retailers needed to be addressed.

"The retail industry is the largest private employer in Australia. We need to ensure that we employ people; there are a whole lot of people out there who actually want to work and there are retailers out there who want to employ those people… and yet the system doesn't allow us to employ them purely and simply because of the cost of labour."

Napper backed his claim and said current legislation is out of step.

"Something we hear commonly from our retail sector clients is that their main aim is to always exceed their customers' expectations, however Australia's current industrial relations system does not always help facilitate this in its current form, particularly around things like higher penalty rates for Sundays and public holidays, as well as some of the technical aspects of making enterprise agreements.

"In our view, the system would benefit from an approach that, within reason, makes it easier and not harder to ensure people are productively engaged in the workforce and that allows employers to focus on their core business."

According to the panellists, the question of new business models and how they are fundamentally changing the way consumers and producers do business going forward presents a challenge for Australia's current industrial relations system.

Lander & Rogers Workplace Relations & Safety Partner Neil Napper said innovation should drive change.

"One thing that this event and our panellists really highlighted was the necessity, if Australia is to be an innovative and agile economy in the 21st century, to ensure that our industrial relations system is one that is focused on the future and not on the past.

"Take, for example, the rise of the sharing economy, which has brought us Uber, Airbnb and Airtasker. These are causing challenges in terms of regulation within our current industrial relations framework.

"We've currently got a system and regulation that is built on the traditional employment relationship, so there's a really big question around how we deal with the kinds of new issues that these types of alternative business models are throwing up, for example around defining the working relationship. Are the people that work for these types of organisations classed as independent contractors? Partners? Agents?

"This is one of the reasons why we thought it was important to hold this event and have this conversation, to talk about the future of Australia's industrial relations system and how it can take us forward, not just to meet current challenges facing business and regulators, but also the challenges of the future around the sharing economy and how to strike the appropriate balance between encouraging growth and innovation while preserving Australia's historical legacy of a fair go all around."

Harnisch said that from an economist's point of view, Australia is part of global economy and it is important that we maintain jobs and investment in Australia.

"Australia has to remain competitive. Our industrial relations system must therefore be an enabler and not an inhibitor," he said. "Ultimately, for the building and construction industry it's about productivity and it's about restoring flexibility so that we can add to the wealth of Australia."

Lander & Rogers Real Estate Sector leader John Wells agreed.

"Regional competition for global investment is fierce and to attract that investment and resulting jobs, Australia needs to not only maintain, but actively look to improve its industrial relations system."