Malcolm Turnbull has poured cold water on a proposal to grandfather penalty rate cuts to protect the rates of existing workers but apply the cuts to new workers immediately.
Turnbull has said the government supports the objective that workers’ take-home pay should be protected but it was up to the Fair Work Commission to decide how to do that.
On Thursday the former employment minister, Eric Abetz, called for Sunday penalty rate cuts in four industries to be grandfathered “ensure that no worker is worse off while allowing new opportunities for the unemployed and especially for young unemployed people”.
Labor has rejected the proposal, arguing high turnover in the retail, hospitality, fast food and pharmacy industries will mean grandfathering is insufficient protection for workers.
Grandfathering could also result in employers rostering new casual employees on Sunday shifts, helping them access the lower pay rates and still lowering the take-home pay of existing workers by offering them less lucrative shifts.
On Friday Guardian Australia reported that the cuts of between 25 to 50% in Sunday rates could be grandfathered, instead of phased in over a number of years, as a means to protect current workers from cuts.
On Thursday on ABC’s AM, Malcolm Turnbull reiterated the government’s support for the independent Fair Work Commission, but declined to comment on the substance of its decision.
At a press conference Turnbull said the evidence was “very strong” that it was more affordable for employers to take on new workers if penalty rates were lowered.
On ABC AM Turnbull noted the commission did not favour exempting current workers from cuts through “red-circling” or grandfathering but rather favours phasing in penalty rate cuts over several years.
He suggested that yearly increases in award base rates of pay could offset reductions in penalty rates to some extent.
“We’re supportive of the commission managing this in a way that ensures that take-home pay is – as far as possible – maintained, that is the objective of modern awards.”
At the press conference, Turnbull said that “how the commission protects low-paid workers ... in this transition is a matter for the commission”.
He said the government supported the objective that workers’ take-home pay is protected, but “how that’s done” – whether through take-home pay orders or phasing cuts in over time – was a matter for FWC.
On ABC AM Turnbull acknowledged that workers who work more public holidays or Sundays could still be worse off.
Turnbull said it was “reckless” for parliament to set penalty rates, and Bill Shorten was a hypocrite for opposing Greens proposals to block penalty rate cuts in 2016 but supporting them after the commission’s decision.
A spokesman for the employment minister, Michaelia Cash, told Guardian Australia the employment department would make a “factual submission” to the commission, but would not weigh in to back grandfathering.
On ABC’s AM, the Labor deputy leader, Tanya Plibersek, said that one-fifth of the Australian workforce changes jobs each year.
“So I’m not sure how long that would actually protect workers for, particularly in areas like retail, hospitality, the industries that are affected by this award cut – you’ve got quite a high turnover of staff.
“That’s not an adequate solution.”
Abetz was asked why employers wouldn’t sack people to employ new workers at lower rates and he replied that adverse action provisions in the Fair Work Act make it unlawful to sack people based on their industrial conditions.
Adverse action would also make it unlawful not to roster old employees on casual shifts to avoid paying higher rates, but the onus of proof for employers to avoid liability is very low.
On Thursday the Australian reported that Pauline Hanson is considering backing away from her calls to abolish penalty rates.
A One Nation spokesman reportedly said the party would “take a look” at Labor’s proposal to overturn the ruling and ban penalty rate cuts that reduce workers’ take-home pay. The Greens have a similar proposal to freeze penalty rates at 2017 levels.
One Nation’s Brian Burston has already supported the FWC ruling. A spokesman for the One Nation senator Malcolm Roberts said the party would “consider” Labor’s legislation “when [the opposition] starts looking at reducing pollies’ pay”.
New employment department figures have called into question union claims that 685,000 workers will be affected by the Sunday penalty rate cuts.
According to the figures because not all workers work Sunday shifts, because only a quarter of the 1.14 million workers on the four affected awards work on Sundays, as few as 285,000 workers may receive a cut.
However the employment department modelling did not factor in secondary effects such as employers seeking to pass on penalty rate cuts in enterprise agreements, or the possibility that more workers will be affected if enterprise agreements are terminated by the commission pushing workers back on to the award rate.
