Retail associations are pushing for Sunday penalty rate cuts to be phased in over 15 months, the minimum length of time suggested by the Fair Work Commission.
Both the National Retail Association and Australian Retailers Association favour the 15-month phase-in period, with no accompanying orders to guarantee current workers’ take-home pay.
The short phase-in period makes it less likely that regular award wage rises will offset penalty rate cuts, as the Turnbull government has suggested, unless unions ask for especially large annual minimum rises as compensation.
On 23 February the commission decided on Sunday and public holiday penalty rate cuts in the retail, pharmacy, fast food and hospitality industries of between 25 and 50 percentage points.
The commission is taking submissions about how slowly to phase in the Sunday rate cuts and in its reasons suggested “at least” two years would be appropriate.
On Wednesday, the ARA announced it would seek the cuts to come in two tranches on 1 July 2017 and 2018. The director of NRA’s legal division, Troy Wild, told Guardian Australia it favoured the same approach.
The ARA executive director, Russell Zimmerman, said this would assist retailers across the industry in creating more jobs, offering additional work hours and increasing levels of service to the community.
“Based on the evidence presented to the commission during this industry-wide case, employees in the industry would experience no, or very marginal, negative impact, as a result of this phased approach,” he said.
Wild said the 15-month phase-in period would provide “certainty … in terms of getting on with business and promoting opportunities for growth in retail and fast food industries”.
The Council of Small Business Australia chief executive, Peter Strong, said the proposal was “very worthy” and the commission should follow the retail bodies’ suggestion because they are “at the pointy end” of having to apply the penalty rate changes.
He said that transitional arrangements had to “show respect for people involved”, including employees, and said the retailers’ suggestions achieved that.
Strong noted that some employers had volunteered to keep existing employees on the higher rate.
“The unions’ message that [the decision] is the end of the world – I’ve got to say, it’s not, it’s nowhere near it,” he said. “They are using it for political purposes.”
The prime minister, Malcolm Turnbull, has suggested that a phase-in period for penalty rate cuts would mean “the impact of reducing the penalty rate on the overall pay packet is offset”.
But examples of workers reliant on Sunday work – such as Margarita Murray-Stark, who stands to lose $2,000 from her pay packet of $30,000 – suggest completely offsetting the rate cuts will be difficult.
Guardian Australia understands that unions have sought advice about how to counteract the penalty rate cut, including the possibility of asking for extra large minimum wage rises in the affected awards.
The Shop, Distributive and Allied Employees Association’s national secretary, Gerard Dwyer, said suggestions that annual minimum wage rises could offset cuts were a “panicked attempt by the Turnbull government to staunch the political bleeding” from the Fair Work Commission decision.
“If Malcolm [Turnbull] really wants to protect the penalty rates of Australian workers, he could, but refuses to do so,” he said.
A spokesman for the employment minister, Michaelia Cash, said “the transitional arrangements to be implemented are a matter for the independent Fair Work Commission”.
Guardian Australia understands the government will make a submission about the power of the commission to order take-home pay does not fall but will not recommend any particular transitional arrangement, nor nominate its favoured length of phase in.
