The National Retail Association (NRA) on Friday said it was “ready, willing and able” to work with the Morrison Government in reviewing the nation’s award system next year.
“The Modern Awards system is far too complex and needs to be simplified to provide greater clarity, particularly to small business,” Dominique Lamb, NRA CEO, said in a statement.
The announcement follows a speech that the Prime Minister gave to the Business Council of Australia (BCA) in Sydney on Wednesday, in which he said he wanted to reduce the complexity of the awards.
On Friday, The Australian reported that Industrial Relations Minister Christian Porter would release a workplace relations discussion paper next year, seeking feedback on ways to simplify the award system.
Porter told The Australian that the awards covering workers in certain sectors, such as hospitality, retail and restaurants, are especially complicated – “some for example with more than 50 pay points”.
Wage theft admissions amp up pressure on industry groups
The review of the award system has the support of industry groups, such as the NRA, the Australian Retailers’ Association (ARA), the BCA and the Australian Industry Group, and it comes as businesses face greater scrutiny from the Fair Work Ombudsman over wage theft.
A new analysis of Fair Work Ombudsman data released by PwC found that 13 per cent of the workforce is affected by entitlement underpayment. That figure blows out to 21 per cent in at-risk industries, such as retail and hospitality.
Some of the country’s biggest retail companies including Woolworths, Wesfarmers and Super Retail Group have admitted to underpaying their workers in recent months, but by and large they said it was unintentional. Outdated payroll systems could be to blame.
Recent research from the Australian Payroll Association found that over 80 per cent of organisations are using payroll technology that is more than 20 years old, and that many companies still have manual tasks in their payroll processes.
“The increased security and human error risks associated with these types of processes is concerning,” said Tracy Angwin, CEO of the Australian Payroll Association.
Lamb agreed, saying that retailers need to ensure their payment systems are complying current laws.
“Although a more simplified set of laws would greatly help, in the meantime all retailers need to ensure that they’re complying with the Modern Awards and are paying their staff correctly,” she said.
Review must focus on employers and employees
Russell Zimmerman, the ARA’s outgoing executive director, welcomes the review, but said any changes to the award system must ensure neither employers nor employees are worse off.
“I think there are some areas where we could be looking to gain more flexibility in the award. One that comes to mind is in part-time. We know there are employers out there who would give part-timers more hours than they’ve allocated, but they don’t because they need to pay high overtime rates,” Zimmerman told Inside Retail.
“It would be much better to employ [a part-timer] without having to pay the high overtime rates than not at all.”
The ARA has a meeting scheduled with the federal government in the coming weeks when it will discuss the issue of the award system’s complexity.
But the SDA, the union for retail, fast food and warehouse workers, said the award system is not particularly complex, and said businesses should spend the same amount of energy ensuring staff are paid correctly as they do blaming the award.
“This announcement is a thinly veiled attack on the Retail Award, which
which was modernised in 2010 and has been the subject of ongoing Award Review proceedings since 2012,” a spokesperson for the SDA told Inside Retail.
“If the industry spent as much time ensuring payroll systems were accurate as they have spent attacking the Retail Award we wouldn’t have had the large underpayments seen across the industry over the last two years.”
The spokesperson said the review ultimately will create a smoke screen for further cuts to employee entitlements.