Last week, the Full Bench of the Fair Work Commission handed down its decision on the Penalty rates case. The Full Bench determined that from 1 July 2017 it would introduce a 25% cut in the minimum payable loadings for workers across the hospitality and retail sectors on Sundays and public holidays. This news has been met with anger from workers, unions and a number of politicians, but where anger should be directed and what should happen next is far from settled.
The penalty rates decision can’t be seen in isolation: it is a symptom of an economy and society in flux, and the product of a system that has valued parliamentary and institutional power at the expense of organised labour.
The Full Bench’s decision will impact the lives of hundreds of thousands of workers. For example, a worker who works regular Sunday shifts in retail will take home between $29.16 and $86.78 less each week, even though they’ll work the same hours. This is a concrete loss that is unevenly distributed across the Australian community. It is women who will bear the greatest burden of these cuts, with an estimated 54% of the affected workforce being women, many of whom work low-paid retail and hospitality jobs on the weekend to support their families, because weekend work offers flexibility in childcare options that may not be possible on weekdays.
As we know, women already experience inequality across Australian workplaces, earning an estimated 20% less than men; this latest decision entrenches inequality further. Indeed, the ACTU has stated that Indigenous women will be the workers most affected by the penalty rates cuts. In a broader socio-political context, where welfare support and parental leave are under attack, the penalty rates decision is bewildering: women trying to support their families cannot manage without work, but that work is now not valued enough to allow them to properly support their families.
Our economy is not some abstract proposition – it is simply the sum total of all of us trying to live our lives the best we can. The economic impact of the Full Bench’s decision, therefore, lies in the interaction between how retail and hospitality workers are likely to cope with earning less per hour on Sundays and public holidays, and how employers are likely to make business decisions based on the wage cut.
To make up for the 25% in lost wages, workers are either going to have to find ways to reduce their spending or work more hours to make up for the gap. But with landlords, banks, private utility companies and other actors using monopoly to extract as much money as they can, workers have relatively little space to reduce spending. Moreover, the social safety net is unravelling, contributing to the anxiety many now experience due to rising costs and precarious incomes.
So the Full Bench’s decision will drive retail and hospitality workers to seek more hours of work for the same pay. In effect, this expands the total supply of labour available to employers and thus further tilts the balance of power towards employers at a moment when wage growth is at an all-time low. Indirectly, this decision has made the lives of everyone of us who rely on a wage unnecessarily harder.
The consequences of this decision go beyond the stress experienced by workers, which in itself is a significant problem. We are at a point in time where the challenges we face in reaching a secure and sustainable future – climate change, for instance – demand a shorter working week, one which reduces working hours without compromising incomes or income security. The FWC’s decision, however, has taken us backwards, and given that trickle-down economics has never worked, there is no reason to expect it’ll suddenly stimulate spending and create jobs now.
Sometimes in the midst of all the rage and noise we can miss some otherwise obvious points, but we cannot map our way out of our present precarious position without some understanding of how we got here. This decision was made as part of a regular four-year review of industry minimum rights and conditions mandated under the Fair Work Act 2009, as instituted by the previous Labor government.
Of the five commissioners who made up the Full Bench, four were appointed by the last Labor government; the Coalition appointment was promoted to the position of deputy president by the then-Minister for Employment and Workplace Relations Bill Shorten. Shorten also appointed the most senior member of the Full Bench, current FWC President Justice Iain Ross in 2012. At the time the Australian Council of Trade Unions released a statement on the appointment singling out Judge Ross as ‘someone Australian workers can trust’.
This is not to make a partisan point against Labor, because none of the parties have the answer here. The Greens’ proposal to legislate on the matter of penalty rates does not, in and of itself, give power back to workers; rather, it potentially places the future pay and conditions of millions of Award-reliant workers in the hands of cross-bench senators like Pauline Hanson, Malcolm Roberts and David Leyonhjelm.
We mention it, however, to make a point against parliamentary and electoral politics in general being positioned as the solution.
After all, the broad legal architecture in which Sunday, public holidays and weekend loadings were first introduced in Australian industrial law and then extended from 1919 through to 1947 is the same as their rollback in 2017. An industrial relations commission made a ruling based on submissions and hearings from unions, employer groups, workers, businesses and all sorts of experts.
The key difference between the two contexts is neither political nor legal. Rather, what has changed is the rate of social struggle and the relative balance of power between workers and employers. Industrial action remains at near-record lows, and workers are less likely to organise into unions.
The Full Bench decision takes place in a context of unions and workers engaging in concession bargains with employers where penalty rates and other hard-won rights are traded for increasingly small wage rises. Furthermore, some employers such as Caltex, 7-11 and those in our food supply-chain feel so confident as to make systematic wage-theft part of their business model. Therefore, we should see the Full Bench decision as giving legal recognition to a pre-existing social reality.
Herein lies the key to a future where every worker earns a decent living and is treated with respect, thereby changing our social reality. Politicians and elections have a supporting role to play in such struggle – but it is predominantly a struggle to be waged at work and in the streets.
We need to consider where we situate power. To locate power only at the level of government, of parliament and of employers means stripping those who are outside of these institutions of power. We need to find our power through organising, and the rights we can win in our workplaces and communities. To beg politicians such as Malcolm Turnbull to intervene in this decision or to tweak the institutional rules is to undermine the power workers have to demand big change and to organise to build a fairer future.
We need to retake control of our lives – and we can only do that through collective action. Such action has to go beyond electoral activity or providing free viral advertising to the odd benevolent employer who will refuse to cut staff wages. It has to go beyond clutching at a past that keeps slipping through our fingers.
Instead, we need to inspire people with a transformative vision of a future, one where we have the freedom to fully live our lives (in our workplaces, families and in our various communities), instead of being forced to take on extra hours of work each week to make the same amount that just gets us by. We need to organise big across workplaces, industries and communities. This is the only way we have ever won meaningful changes through history that have transformed our societies for the better. The first step is recognising that power is not hierarchical, but something we already have when we stand together.
A better future is within reach if we have the courage to take collective action in the face of failure and ruin. We can do this if we commit to it. The fight for fair wages is just one part of building a better future; let us grasp this moment as our opportunity to stand together and create a collective vision for the Australia we want to live in. Let’s not beg for the minimum, but demand a fair share.
When it comes to Full Bench’s decision to cut wages, don’t mourn, organise!
Image: ‘Barista’ / Jeremy Keith