ACTU: Penalty rate cuts will create 'a new class of working poor'

Protesting outside the Fair Work Commission. Image: UnitedVoice Victoria

The Fair Work Commission decision to cut Sunday penalty rates will hit Australia’s lowest paid the hardest, according to unions.

ACTU president Ged Kearney says those whose pay has been cut will have to work more hours, work longer shifts.

“We will be seeing a new class of working poor similar to what we see in the US where people have to work two or three jobs, go in and out of welfare,” she says.

“This is a bad day for workers … rules must be changed”.

She says prime minister Malcolm Turnbull will preside over the biggest pay cut to low paid workers since the Great Depression if he doesn’t intervene.

Up to 700,000 workers, including some of the lowest paid who need the penalty loading to survive, are affected.

The ACTU says the changes will mean a loss of up to $6,000 per year for some workers.

“This is a cut Australian workers cannot afford and do not deserve,” she says.

“The decision also comes a day after record low wage growth was reported for the second consecutive quarter.

“Australians deserve a pay rise, not a pay cut.

“This decision is a game changer for industrial relations in Australia. The independent umpire makes decisions based on the rules they are given. These rules are contained in our laws.

“We need the rules to change so penalty rates cannot be cut and our parliament must act now to protect working people.”

Under the changes, retail workers and those working at pharmacies will see their Sunday double time reduced to 150% of their hourly rate.

Sunday pay for full-time hospitality workers will be cut to 150% from 175%. However, casuals workers will still get 175%.

In the fast food industry, the rates will drop to 125% from 150%.

The Fair Work Commission acknowledged that a substantial proportion of employees affected are low paid.

“Many of these employees earn just enough to cover weekly living expenses, saving money is difficult and unexpected expenses produce considerable financial distress,” the commission said in its judgement.

“The immediate implementation of all of the variations we propose would inevitably cause some hardship to the employees affected, particularly those who work on Sundays.”

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