Momentum is building in the Coalition for industrial relations reforms that could mean cuts to weekend penalty rates, with Liberal MPs suggesting higher rates of pay across the seven-day working week as a possible trade-off.
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Six Liberal backbenchers said on Tuesday that weekend penalty rates should be reduced in sectors such as hospitality, retail and tourism to drive business growth and stimulate employment, particularly of young people. One even suggested federal intervention if the independent Fair Work Commission did not move on the issue.
The comments came after Prime Minister Malcolm Turnbull gave his clearest signal yet that changes to penalty rates could be on the table at the next election, suggesting "over time you will see a move to a more flexible workplace".
Mr Turnbull said that Sunday penalty rates, which can be up to twice the weekday hourly wage and are in excess of the time-and-a-half paid in some sectors on Saturday, were an artefact of history. "The only reason they're different, I assume, is history," he told Fairfax radio station 3AW, adding “of course" Australians now lived and worked in a seven-day economy. However, he was cautious about the need to persuade unions and workers of the need for change and that "in net terms they'd be better off".
Mr Turnbull said workers would be "naturally reluctant" to give up their benefits and that "any reform has got to be able to demonstrate that people are certainly not going to be worse off and, overall ideally in net terms, better off".
Any reform has got to be able to demonstrate that people are certainly not going to be worse off.
- Prime Minister Malcolm Turnbull
That could mean, for example, that while weekend penalty rates could come down weekday pay rates could be raised to compensate. Such a deal would still have to be approved by the Fair Work Commission under the ‘better off overall test’.
Opposition Leader Bill Shorten said Mr Turnbull had "given WorkChoices the kiss of life" and that Labor opposed reforms that could mean "millions of ordinary Australians take a pay cut".
The Prime Minister's comments, as well Employment Minister Michaelia Cash's suggestion weekend penalty rates deterred employment, emboldened Liberal MPs to speak out on the need for change.
NSW Liberal MP Angus Taylor said penalty rates should be reduced on weekends to help tackle youth unemployment, which has been stuck at a high of 13.6 per cent since March. Particularly in hospitality, “penalty rates are an issue”.
