Unions make last-minute push to block penalty rates changes through Federal Court appeals

Unions United Voice and the Shop, Distributive and Allied Employees Association have submitted two last-minute appeals to the Federal Court to block changes to Sunday penalty rates that will start coming into effect from July 1, in a move business leaders label “hypocritical”.

A judicial review application lodged by United Voice last Friday against the Fair Work Commission claims the the Commission has “failed in its obligation to uphold the living standards of Australian workers”.

The documents filed allege the Commission failed its duties in relation to the Fair Work Act, specifically related to ensuring award rates were “fair and relevant”, claiming the phrase was “misconstrued” and “suited to contemporary circumstances” in its decision to lower Sunday rates. United Voice also claims the Commission did not factor in the living standards of low-paid workers.

“We are compelled to take this legal step. We cannot accept these cuts which impact so dramatically on workers,” United Voice national secretary Jo-anne Schofield said in a statement on the issue.

“The Fair Work Commission’s decision to cut pay is significant. It symbolises a turning away from a long-held principle that has guided industrial law in this country for over a century – that the needs of workers should be placed on an equal footing with business and economic interests.”

Additionally, the Shop, Distributive and Allied Employees Association (SDA) has also lodged a similar appeal in the Federal Court, claiming the Fair Work Commission failed to consider and act within ”the proper ambit of its powers in connection with the Modern Awards Review”.

“To protect the take-home pay of workers, the SDA is taking the battle to the Federal Court by appealing the Fair Work Commission’s decision on weekend penalty rates,” SDA national secretary Gerard Dwyer said in a statement.

Both United Voice and the SDA are hoping to have the appeals fast tracked ahead of the penalty rate changes, which will begin to take effect from July 1 in line with transition arrangements outlined by the Fair Work Commission. The Commission has decided to implement a staggered approach to rolling out its sweeping penalty rates changes, which will see retail, hospitality and pharmacy workers rates in affected employee classifications lowered by five percent from this Sunday.

The full effect of the cuts will be seen across each affected award by 2020.

Council of Small Business Australia chief executive Peter Strong told SmartCompany the moves from the unions, specifically the SDA, are “absolute hypocrisy”, and said his organisation opposed the moves to quash penalty rates changes.

Strong thinks the Fair Work Commission should hold off from “any legal proceedings” until the outcomes of the Senate inquiry into the penalty rates deals between union organisations and big businesses, instigated by South Australian independent Nick Xenophon, are known.

The inquiry will look into the SDA’s deals with businesses like Wesfarmers and Woolworths, reports Fairfax, which have allegedly cost workers millions of dollars thanks to lower penalty rates negotiated through enterprise bargaining agreements. It is from these deals which the “hypocrisy” stems, says Strong.

Strong believes many small businesses will be hesitant to implement the rates changes should they go ahead due to uncertainty around if the changes are here to stay, and believes SMEs who intend to employ more people on Sundays due to the changes are unable to say so due to fears of being targeted.

“We’ve got a more sinister problem, which is if a small business says they’re going to employ more people on a Sunday, they are targeted on social media. We can’t tell anyone who these businesses are out of fear of them being targeted,” Strong says.

“A lot of small businesses aren’t looking to implement the changes with their current workers anyway, so there will be absolutely businesses that will hold off.”

Strong says it’s hard to know how the courts will decide on the unions’ appeals, saying other decisions from the Commission have historically been confusing, “so who knows”.

“Overall I’m hoping we get certainty and fairness and equality on Sunday penalty rates,” he says.

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