July 02, 2018 12:34:42
On July 1, selected categories of workers in the fast food, retail, hospitality and pharmacy industries had their Sunday penalty rates cut for the second time, in line with a decision made by the Fair Work Commission in 2017.
The total sum of the cuts as a result of the decision is due to be fully phased in by 2020, with the first round occurring last year.
As it did when the first round of cuts came to pass, the Opposition has used the latest round to attack the Government.
Recently-elected Labor backbencher Ged Kearney tweeted:
“This Sunday 700,000 Australians will have their penalty rates cut again with workers losing an average of $77 per week.”
The 700,000 figure remains unchanged from claims made by Labor in 2017, which Fact Check found to be fanciful.
The original claim
Before the first round of penalty rate cuts, on June 26, 2017, Labor’s spokeswoman for justice, Clare O’Neil, told the ABC’s Q&A program:
” … on Sunday, in fact, this penalty rate cut will take effect — 700,000 of the poorest-paid people in the country are going to have an effective pay cut”.
The same claim had also been made by Opposition Leader Bill Shorten a fortnight later:
“If we get elected we will reverse the unilateral cuts to penalty rates covering 700,000 low paid Australian workers.”
Fact Check found that the 700,000 figure came from a 2017 report produced by McKell Institute (a self-described “progressive research institute” with many senior staff associated with the Australian Labor Party).
The report, entitled “The Impact of the FWC’s February 23 Sunday Penalty Rates Decision”, found that “up to 681,378 Australians are currently working under awards that are subject to the proposed changes across the retail, hospitality and fast food sectors.”
Ms O’Neil took the number of 681,378 people that features in the McKell report and added 28,149 pharmacy workers, to obtain a total of 709,527 people who would have “an effective pay cut.”
But the report did not say that this many people would receive a pay cut, as the number only estimates the total people who work under a particular award, and not how many work on a Sunday.
Even people who work for an employer that never opens on a Sunday are included in the 700,000 number.
Chris Oliver, an employment and industrial relations lawyer at law firm People + Culture Strategies, told Fact Check:
“There is data in the FWC decision suggesting there are 700,000 award reliant workers in the hospitality and retail sectors, but the data also indicates that, on average, only around 54% of award workers across both sectors actually work on weekends.”
“The figure is likely to fall further when you consider that this data includes all weekend workers, not just those working Sundays,” he says.
Furthermore, Fact Check found that the estimates in the McKell report may themselves be overstated, as the report assumes that 75 per cent of the 515,820 hospitality industry employees are reliant on the award to which the penalty rate cuts apply.
But Sunday penalty rate changes do not apply to all types of hospitality workers, and an Australia Bureau of Statistics survey found that 42.7 per cent, rather than 75 per cent of workers inthe Accomodation and Food Services industry are paid under an award.
And the FWC’s own Award Reliance Survey (as noted in paragraph  of the FWC decision) indicates that 34.5 per cent (not 45 per cent, as noted in the McKell report) of retail employees are award reliant, and out of these only 74.3 per cent work under an award impacted by the FWC decision.
Other calculations of the number of workers affected found the figure to be much lower than 700,000, but these calculations can only ever be estimates.
Professor Mark Wooden of the University of Melbourne said:
“Given the broad assumptions made, the 700,000 figure is not credible and far too high, but no one really knows what the net effect will be.
“While many workers will get a cut in pay per hour, some of these workers will get an increase in hours worked, offsetting some of their reduction in total pay, and still other workers who don’t currently work on Sundays will now be offered work on Sunday.”
Ultimately, Fact Check found that 700,000 people did not get an effective pay cut on July 1, 2017. The figure was, and still is, fanciful.