Industrial Relations Commission delays start of new modern award pay rules

The Australian Industrial Relations Commission will delay the phasing in of new penalty rates under the Rudd Government’s new Modern Awards from 1 January 2010 to 1 July 2010, to give employers time to deal with the “significant impact” of the changes.

But employer groups have reacted angrily to the AIRC’s statement that some employers will face higher costs under the new modern awards. Federal Workplace Minister Julia Gillard has repeatedly said that no worker or employer would be worse off under the new awards.

“It is clear that some award conditions will increase, leading to cost increases, and others will decrease, leading to potential disadvantage for employees, depending upon the current award coverage,” the full bench of the AIRC said in a decision released yesterday.

Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry, isn’t impressed that Gillard’s promise appears almost certain to be broken.

“The tribunal’s conclusion that “cost increases are in prospect” will disappoint employers who have relied on Government assurances that the process was not intended to increase their costs.”

Retailers, companies in the catering sectors and agricultural businesses have all complained that the new awards will increase wage costs and could put some smaller operators out of business.

To help businesses deal with these higher costs, the AIRC has pushed back the phasing in of new penalty rates from the original start date of 1 January, 2010 to 1 July, 2010.

The AIRC will also use the full five year transitional period allowed under the new awards to phase in the new penalty rates and cost increases.

“On the material presented to us concerning the national and international economy, it is clear that we should take a cautious approach where cost increases are in prospect,” the full bench said.

“We have decided that any costs increases resulting from the introduction of modern awards should be spread over a lengthy period.”

The Australian Retailers Association has welcomed the AIRC’s decision to use the full five-year transition period, but has warned that jobs won’t be protected forever.

“There is still a concern the phase-in of weekend penalty rates may only protect retail jobs for the time being, by delaying retailers’ decisions to either close their doors on Sundays or cut back on staff who usually work on weekends,” the ARA’s employment relations spokesperson Yvonne Anderson said in a statement.

“For small retailers the increased wage bills will eventually begin to outweigh the commercial benefits of meeting consumer demand and of employing workers for Sunday trading.”

Peter Anderson also welcomed the transitional arrangements, and wants to see more analysis on the impact on individual sectors.

“Even with the transitional arrangements, the new national industrial awards will have a considerable sting for many employers in industries traditionally covered by state industrial relations systems.”