Productivity Commission backs penalty rate cut and unfair dismissal reform

Labor’s workplace relations spokesman, Brendan O’Connor, said allowing bosses to hire people to work alongside colleagues on better conditions would “corrode” the workplace relations system.

In its review of the workplace relations framework, the commission found that “contrary to perceptions, Australia’s labour market performance and flexibility is relatively good by global standards” but several major deficiencies need to be addressed.

Unions say the new report by the Productivity Commission confirms their concern that an inquiry into the workplace relations system had been set up by the Abbott government to attack penalty rates.

While enterprise bargaining generally works well, it is often badly suited to smaller businesses, the report says.

Adam Bandt from the Greens says any cuts to penalty rates will hurt young people in Australia.

The report said current penalty rates paid for staff working on Sundays were out of step with the social costs borne by people working on that day.

“These are draft recommendations and they would not seek to have any of them ruled out”, he said.

“It is a report to government, not a report from government”, the prime minister said.

“Recent research has shown that local economies across rural NSW would be up to $111 million worse off each year if penalty rates for retail workers were cut”.

Kate Carnell, chief executive officer of the Australian Chamber of Commerce and Industry, said she was looking forward to meaningful recommendations on the awards system, unfair dismissal, penalty rates and ways to make it easier for small businesses to employ staff.

But the National Retail Association – one of the bodies representing businesses in the industry – strongly backed the commission’s “sensible, measured and well-considered” recommendations.

The proposal would not affect the positions of tribunal president, Iain Ross and vice-president MIchael Lawler, the partner of former union leader Kathy Jackson who has been embroiled in controversy not least due to his long absences from work.

He says the National Employment Standards and industry awards should be retained but need to be modernised.

“The industry would welcome the ability to reduce the fixed costs of the current penalty rates particularly Sundays and public holidays”.

“It is essential that the federal government, the opposition and all other parties not rule anything in or out at this early stage”, Mr Willox said in a statement.

The enterprise contract would be a statutory arrangement that could vary award conditions for a class or particular group of employees. An employee would later be able to lodge a complaint if the agreement breached the no-disadvantage test.

The employer would have to lodge the contract with the FWC, but would not have to gain its approval.

“There are ethical and community norms about the way in which a country treats its employees”.

“The bottom line is we are pretty confident from analysis that [cutting Sunday penalty rates] will increase overall employment in those services industries and provide consumers with additional benefits”.

Employment Minister Eric Abetz said the draft recommendations are now open for comment before the commission handed down its final report later this year.