Workers build super by winning rights to penalty rates

Hundreds of Pancake Parlour workers across Australia have secured more funds to put in their super by winning the right to penalty rates for late nights and weekends in an important court case.

The case

Waiter Tim Sarder, 21, launched legal action in August 2015 to be paid under the award rather than the company’s archaic WorkChoices wage scale. The company did not oppose the legal action, perhaps happy to move into a new era.

The Pancake Parlour’s previous WorkChoices wages agreement was terminated last week as a result. It has been replaced by the restaurant industry award, which is expected to raise the pay of up to 750 workers down under.

The hospitality industry is notorious for paying minimum wage – but Pancake Parlour didn’t even reach Australia’s minimum wage of $17.29 per hour for some workers. Under the previous deal, workers earned between $13-$23 per hour depending on age and responsibilities, with no penalty loading rates for late night and weekend shifts.

Under the award, some waiters will be up to $2,500 better off per year. At a superannuation contribution rate of 9.5% (assuming they are earning above the minimum monthly threshold for superannuation contributions to be paid), that means around $237.50 more going into their super every year.

According to Fair Work Commissioner Julius Roe, Pancake Parlour employees will now be entitled under the award to a range of benefits they were not receiving under the WorkChoices agreement, such as:

  • Penalty rates
  • Certainty of working hours
  • Minimum breaks between shifts
  • Laundry costs

The penalty rate debate

This case comes at an interesting time for Australia. Businesses are urging the newly-crowned Prime Minister Turnbull to remove all penalty loading for Sunday shifts for hospitality, entertainment and retail workers, bringing pay levels down to Saturday wages. Small businesses struggle to survive in a 7-day economy when they have to pay their workers so much on their busiest days.

Mr Turnbull himself commented in 2014, “You see businesses, particularly hospitality businesses like cafes and restaurants and so forth, closed on weekends … because the penalty rates are so high. Now that’s nuts.”

In fact, Pancake Parlour has responded to the court case by saying that the new pay scale is forcing the company to reconsider its 24-hour and 3am trading hours for most of its restaurants. Management has also stated that it may have to stop offering free meals to staff, and lay off supervisors in favour of cheaper casual workers – a risky move.

However, unions are rallying across the country against what they call an attack on low-paid workers. One hospitality union, United Voice, has publicly praised Mr Sarder for standing up for his rights as a young worker.

Australian Council of Trade Unions secretary Dave Oliver has said removing penalty loading would hit Australia’s youngest and most vulnerable workers. He called the report a “Trojan horse that’s going to deliver WorkChoices part two”.

The removal of penalty loading will not apply to other workers, including emergency workers such as paramedics, leading some to say that the proposals are unfair.

Assistant Secretary David McElrea said, “It is outrageous to say that some people’s weekends matter more than others… This is economic apartheid.”

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