Retailers say Fair Work will force staff cuts and raise wage bills

The Australian Retailers Association has attacked the Government’s new Fair Work legislation, saying it will increase wage bills and burdens for businesses.

The organisation’s new research finds 12% of retailers will cut staff to cope with the new laws, while 36% of retailers intend to limit the hiring of new staff. Additionally, about 41.5% of retailers intend to make rostering changes as a result of the laws, with over 32% of retailers to give employees fewer hours.

About 45% of retailers also said they are not aware of how the new Fair Work legislation will impact their businesses.

ARA executive director Russell Zimmermann said in a statement retailers are attempting to be compliant with the new laws, and will continue keeping staff on payroll, but more assistance is required.

“Currently, over 54% of retailers have made operational changes to comply with the Fair Work Act but over 83% of retailers need to do more before they are fully compliant. Almost 72% of retailers don’t fully understand their obligations under the Fair Work Act,” Zimmerman said.

“Of the 40% of retailers who expect to see wage and operational cost increases as a result of new IR laws, over 42% expect these increases to be between five and 10%. However, good retailers understand holding onto staff is the best thing they can do for their business and for the wider economy.

But while 12% of retailers say they will be forced to let staff go under the new regime, this is well down on the 68% who forecast lay-offs to cope with the new IR laws back in march 2009.

He says this indicates how Fair Work seminars succeed in educating businesses and relieving fears.

“These are massive changes and it’s crucial the Government recognises the key role employer groups play in getting employers up to speed with the new laws to help them manage increased costs without letting go of staff,” Zimmerman said.

“Retailers are now diligently looking at other ways to deal with cost increases as a result of Fair Work. They are attending Fair Work information seminars run by employer associations (almost 49%) and actively looking for assistance to comply with new laws and manage associated costs without shedding staff.”

Shadow small business spokesman Bruce Billson says the ARA research shows the Government has failed to educate small businesses as to how the legislation will truly impact their day-to-day operations.

“It’s extremely troubling. In some of parts of the country, such as Queensland, some of the changes are now having an impact on cost and in New South Wales, some of their previous trading hour flexibility has been lost.”

“This makes it absolutely clear the Government has comprehensively failed to deliver its two key undertakings, first that there be no additional costs and they won’t be worse off, and two, there would be comprehensive education campaigns to support the implementation.”

Billson says the Government must begin fully educating the small business community about their responsibilities under the new laws, rather than condemning them for doing the wrong thing.

“They’ve got to absolutely get cracking on the information campaign that small business representatives have been calling on for some time. That was promised, that’s what’s needed, and it’s what they should be doing rather than cracking down on businesses not complying.”