HRMT20027 Report: Analyzing the Fair Work Commission's Decision

This report critically examines the employment relations issues stemming from the Full Bench of the Fair Work Commission's February 2017 decision concerning the four-yearly review of modern awards, specifically focusing on penalty rates. It delves into the arguments both for and against the reduction of penalty rates, analyzing the decision's impact on Australian society and the lives of workers. The report explores the implications of the decision, including potential effects on job creation, wages, and the political landscape, considering the perspectives of employers, unions, and the government. It also investigates the effects of the changes on different sectors, such as retail, fast food, and hospitality, and how they may impact various groups, including young workers, students, and families. The analysis encompasses the political debate surrounding the decision, including the legislative agenda and its potential influence on the federal election. Furthermore, the report examines the Fair Work Commission's role, functions, and the context of the decision within the broader framework of Australian industrial relations. Finally, the report provides a comprehensive overview of the key issues and consequences arising from the Fair Work Commission's determination on penalty rates.

Running head: HUMAN RESOURCE MANAGEMENT AND EMPLOYMENT
RELATIONS
HUMAN RESOURCE MANAGEMENT AND EMPLOYMENT RELATIONS
Name of the Student
Name of the University
Author Note

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Executive Summary
In this report, the main objective will be to discuss will be to discuss about the Full Bench of
the Fair Work Commission on 23rd February 2017 and the effects it ad on the society as well
as to the life of the workers in and around Australia. The arguments will be discussed which
is based on for as well as against the motion of reducing the penalty rates.

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Table of Contents
Introduction................................................................................................................................3
Summary of the Fair Work Commission on 23rd February 2017...............................................3
Argument for and against the Penalty Rate Change..................................................................5
Arguments for the change......................................................................................................5
Political Debate..........................................................................................................................6
Conclusion..................................................................................................................................8

3HUMAN RESOURCE MANAGEMENT AND EMPLOYMENT RELATIONS
Introduction
In this report, the aim or objective of the discussion will be to discuss about the Full
Bench of the Fair Work Commission on 23rd February 2017 and the effects it ad on the
society as well as to the life of the workers in and around Australia. The arguments will be
discussed which is based on for as well as against the motion of decreasing the penance rates.
The proof of the effect of the deduction in the penance rates on job and salary will also be
discussed. The political argument regarding the resolution of the Fair Work Commission will
be taken into account, along with the discussion relating with the approval or rejection of the
decision. The implications, if anything is possible, will also be discussed, on the decision for
the Fair Work Commission’s future. The Fair Work Commission (FWC) an industrial
relations panel from Australia which performs its operations since 2009. A tribunal can be
termed as an institution or a particular person who possess the power to judge or help in
determination of the disputes or claims. The main motto of the Fair Work Commission is to
provide a panel for national workplace relations in the region of Australia. The body is
authorized by the Fair Work Act 2009. It was created as part of the reformation of the
manufacturing relations in Australia for the Government of Rudd. The main functions of the
Fair Work Commission involve the setting and also changing of the industrial awards, dispute
resolution, and fixation of the minimum wage, to approve the agreements of the enterprises
and to handle the unfair dismissal claims in the country of Australia (Stewart, 2016).
Summary of the Fair Work Commission on 23rd February 2017
The Fair Work Commission decided to reduce the holiday penalty rates on Sunday as
well as on the public holidays. Due to this, some of the lowest-paid workers of Australia will
perform very less to boost the morale of the workers of the small business houses to keep
open their offices on these particular days. The single parents, scholars and other people who

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used to earn less income who usually depended on the penalty rates to increase their earning
will now face difficulty to earn more income at the end of the month. It can be said after this
that there will be a considerable cut in the weekly income of some people. And this will also
put more pressure who are already facing the pressure. It will, though, not hurt the young
people, but will have an adverse effect on the people who are mainly working for the sake of
continuing their education and to live their life with that. These includes the international
students who visit Australia for higher studies and do part-time duties for their pocket money
apart from the students from Australia. The news has been spread that the depletion in the
penance rates will boost the morale of many business houses to keep open their operations on
Sundays as well as on public holidays. But the opposite thing may also happen, as many
business houses will not like to run their operations for seven days a week. In the regional
cities, the number will be automatically less because of the existence of fundamental
problem, which is the lack of demand. It will mostly have the adverse effect on the young
people as well as the families who fall under the low-income group. The purpose of casual
employment and part time job will be defeated if there is for more hours to work on. If
anyone wants to work for long time to live their life, then it will result to other consequences.
It may affect the lives of the students and the young families might have to expert childcare
in order to be capable of working. There will be more jobs available in the market and more
money will be available as well, but no one knows when that will be available, and this s the
point where the argument lies in the society. This will be a long-lasting issue and it cannot be
denied that there will be losers after this decision will come into effect. This issue would lay
the base for the legislative agenda and would have a huge impact on the next federal election
in Australia (Macdonald & Charlesworth, 2013).
The decision has been made mainly to the full-time as well as part-time employees in
the retail, fast food and hospitality sectors. The Government has defended the decision while

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the Union Bodies are preparing to appeal. It will be a tough task for the human resource to
manage the fallout due to this decision by the Fair Work Commission. Workers will continue
to face the penalties, but the rates will be deduced. The pay rates of the standard wages for
the full-time as well as the part-time workers of the hospitality sector will be cut from 175 %
to 150%. The same for the fast food workers will be cut from 150% to 125%. Though the
Fair Work Commission has not decided yet from when this decision would come into effect,
they had indicated that it would come into effect within a year. This is for the Sunday rate
cuts. The public holiday reductions would start working from 1st July, 2017. This issue has
been responded to with anger by the union, as according to them the workers who used to get
low wages will be severely hit by this discussion. According to the Australian Council of
Trade Unions (ACTU), some of the workers of the country who used to get low salaries,
would lose up to $6,000 in a year, and the young workers would suffer the most. Some of the
organizations like supermarket chain giant Coles said their employees would have no effect
due to this rates, other retailers were not ready to adjust their pay rates. For example,
cosmetics company LUSH has taken an ethical stand on this issue. They were not ready to
apply the Fair Work reduction on the awarded wages paid to the employees on Sundays as
well as on Public Holidays, as they felt that the reduction is more focused on the employees
of the multinational employees, as life is getting more difficult for the employees of the lower
pay sectors (Macdonald & Charlesworth, 2013).
Argument for and against the Penalty Rate Change
As said earlier, the rates would be applicable to the retail, fast food, pharmacy and
hospitality sector (Wilson & Pender, 2015).

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Arguments for the change
The reduction in the penance rates would allow the employers to appoint more
employees to the organization. Apart from that, more venues from the hospitality sector
would be open on Sundays it would also provide a healthy and better experience for the
customers with more availability of the entertainment and hospitality venues with presence of
more employees. The consumer expectations would be more than before existence of living
in a 24/7 world would come into effect hugely due to the alterations in the lifestyle and
technology. The businesses also will earn extra money due to the more opening hours as well
as rise in the level of the employees and prices would also come down. Thus no extra amount
would be paid to eat in the restaurants on Sundays. The students could also work on Sundays
and study in between Monday to Friday. The Productivity Commission and Small Business
Houses are the parties who argued for the change (Peetz, 2016).
On the other hand, the Unions and Workers are the bodies who argued against the
changes. The change would take the money directly from the pockets of the people who
would work on Sundays. There would be no assurance that the employers would hire extra
people, so the existing workers might have to work for 7 days a week. The restaurants and
cafes are already enjoying a high increase rate and the double fare would be a fair
compensation for missing the family programs, enjoying sports and leading a normal social
life. The cut in the wages would deduct the earning, and therefore, would reduce the spending
as well. The normal workers with children would spend less time at home (Peetz, 2016).
Political Debate
Penalty rates are a topical concern in the political argument that encloses the reform
of job relations in Australia. Rates of pay can be said to have sat government independence.
The political parties took it as a chance to increase the pay and to attract the voters to vote for

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them. The Leader of the Opposition minister was accounted for the decision taken to
diminish the penance rates in some of the restaurant awards by the Fair Work Commission.
The bill, which has been talked about between the political parties of Australia, the fair Work
Amendment (Restoring Penalty rates) Bill 2018, does not involve the changes required in
enterprise bargaining agreements. In 2006, 780 workers of BigW in North Queensland had
reduced the penalty rates from 200% to 150% in an agreement. In another agreement in the
same year, 129 workers of Target in North Queensland reduced the penalty cut just like the
same thing that happened with the workers of BigW. The opposition leaders were saying
about the turnaround as well as overruling the Fair Work Commission, which they formulated
(Healy & Kidd, 2013).
The rates though should be reversed. The reduced labour costs for working on the
Sundays as well as on other Public holidays, the penalty rates will be blower, and this will
bring the opportunity of employment I n the market. The employment can be from new
hiring, or working for longer hours for the existing workers, or both. There will be almost
40,000 new jobs in the market due to the pay cut. Many people welcomed the decision as it
would help a lot of people to get employment in the retail, fast food, pharmacy as well as
hospitality sector, where the rates would be applicable. Many students who come to study in
Australia or the students from Australia itself can work in the above four sectors where the
rates would be applicable from 1st of July, 2017, for the sake of some pocket money which
can be used in further studies or paying the rent for accommodation purposes. Again on the
other hand, other people can get a job opportunity in these sectors in order to run their
livelihood or contribute in their family. But, a fresh report studied that the employment as
well as the increase in the working hours have underperformed among the other parts of the
economy, and two sectors which were actually hit according to this report were the
hospitality and retail industries. The report laid the detailed data on employment,

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underemployment, full-time employment, average hours of work and the incidence of short-
hours work, which is normally 20 hours per week. Taking into account all these criteria, the
hospitality and the retail sector performed the poorest performance among the other industries
in the year since the penalty rates were cut for the first time. Among the other industries
where the rates were not changed, created more job opportunities than these two sectors.
Among these two sectors, the retail sector performed poorer than the hospitality sector. Total
employment remains unchanged and the full-time employment decline by 50,000 positions.
The average weekly hours of work got reduced by more than a full hour, and the
underemployment ratio grew to almost 2 percentage points. Though the report did not suggest
that all these had been caused due to reducing the penalty rates, but the data certainly
disproved the rising claims by the employers as well as by the government (Buchanan &
Oliver, 2016).
Conclusion
From the above discussed report, it can be said that if there is any actual want to
strengthen the employment conditions, then stronger wages and incomes, stronger private as
well as public investment and strong purchasing power all over the economy should be
emphasized. Only reducing the penalty rates and other policy measures as well would not
solve these major issues, rather it would make them worse.

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Reference
Buchanan, J., & Oliver, D. (2016). ‘Fair Work’and the Modernization of Australian Labour
Standards: A Case of Institutional Plasticity Entrenching Deepening Wage
Inequality. British Journal of Industrial Relations, 54(4), 790-814.
Healy, J., & Kidd, M. P. (2013). Gender-based undervaluation and the equal remuneration
powers of Fair Work Australia. Journal of Industrial Relations, 55(5), 760-782.
Macdonald, F., & Charlesworth, S. (2013). Equal pay under the Fair Work Act 2009 (Cth):
mainstreamed or marginalised. UNSWLJ, 36, 563.
Peetz, D. (2016). Industrial action, the right to strike, ballots and the Fair Work Act in
international context. Australian Journal of Labour Law, 29(2), 133-153.
Stewart, A. (2016). Continuity and Change in Australian Labour Regulation: Work Choices,
Fair Work and the Role of the ‘Independent Umpire’.
Wilson, J., & Pender, K. (2015). Open justice and closed courts: From Fairfax to Fair
Work. Ethos: Official Publication of the Law Society of the Australian Capital
Territory, (235), 20.