Jos de Bruin, CEO of MGA/LRA said that employers should act cautiously before rushing to use a “template agreement” by the SDA and Business SA to reduce penalty rates. If they do, employers will need to increase their hourly rate to $20 an hour, plus superannuation, and a three per cent annual increase over three years.
Mr. de Bruin added: “This widely publicised reduced penalties agreement is not ground breaking news, it’s just literally “buying out” the penalty. It’s not a genuine reduction. These “penalty buy out agreements” are quite common in all states.
“Last year MGA/LRA negotiated an agreement with the SDA for 70 retailers in Victoria, where the Sunday penalty was reduced to 70 per cent, no evening penalties and no leave loading, with an hourly rate of $19.40. The point is that the law requires that the employees must be “better off overall” in any agreement than under the award, otherwise the Fair Work Commission will not approve it. So the employer must pay more for any reduced penalty in an agreement. It’s not really a cost saving for employers.”
Mr. de Bruin continued: “We want to see the costs of employing staff reduced, we want a reduction in the Sunday rate to 50 per cent, with no change to the base rate. This new agreement in SA is badly timed, it will not benefit most retailers and undermines the efforts of many retail organisations in their pursuit of reduced Sunday penalty rates, in the current Fair Work Commission four year award review.”
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