Retailers have slammed the passing of the Federal Government’s Penalty Rates Bill.

The Australian Retailers Association and National Retail Association say the law will hurt wage growth, limit workplace flexibility and undermine the authority of the Fair Work Commission.

ARA chief executive Chris Rodwell said the legislation interferes with the independent industrial relations process and creates unnecessary red tape for businesses.

“The bill is yet another layer of regulatory burden which creates more problems than it solves,” said Rodwell.  

“It effectively forbids businesses and their employees from negotiating the incorporation of penalty rates into base salary, an option which could lift that salary by as much as 135 per cent.” 

He also aimed the debate surrounding the legislation, saying it was marred by misinformation. “Time and time again during the debate of this bill, there has been a complete misunderstanding of the penalty rates application before the FWC,” he added. 

“We even saw union testimony at the August penalty rates hearing where case studies put forward were unrelated to the case, including statements of junior employees who would not be impacted, given this aspect of the application would only have applied to more senior employees.” 

According to the ARA and NRA, the bill will especially hurt small businesses already struggling with complex compliance burdens. They argue it contradicts the government’s stated aim of reducing red tape and fostering productivity.

“We are deeply disappointed that the reasonable proposal of some parliamentarians to examine the impact of this legislation on small businesses has not occurred,” said Rodwell. 

Both associations, which are on a merger track, say the bill is a missed opportunity to modernise workplace relations and improve outcomes for workers and employers alike.

• This story was originally published on Inside Small Business.