The Productivity Commission released its final report on the workplace relations framework in late December 2015. The report marks the completion of the Commission’s inquiry into the workplace relations framework.
A summary of the key points, as finalised by the Commission, are as follows:
- The wage regulation function of the Fair Work Commission (FWC) should be separated from it. The existing FWC should concentrate on its tribunal and administrative functions and a new body, the Workplace Standards Commission (WSC) should determine minimum wages and award regulations.
- The Fair Work Act should be amended to minimise unnecessary compliance costs and poor outcomes as a result of the current unfair dismissal and enterprise bargaining provisions.
- Complementary policies that provide in-work benefits – such as wage subsidies or an earned income tax credit – might support higher incomes for lower paid employees.
- Minimum wages are justified; however, significant minimum wage increases pose a risk for employment.
- A new form of employment arrangement, the enterprise contract, should be introduced as a means to reduce complexities that smaller businesses face when making enterprise agreements.
- Sunday penalty rates for hospitality, entertainment, retailing, restaurants and cafes should be aligned with those on Saturday reflecting changing consumer preferences.
Business groups say that the cut to Sunday penalty rates will deliver more jobs and benefit consumers, while Unions and the Federal Opposition believe that it is an attack on the lowest paid workers of Australia.
Employment Minister Michaelia Cash said that it was up to the Fair Work Commission to make the final decision.
“The Government has no plans to change penalty rates” Ms Cash said.
“Penalty rates are set by the independent Fair Work Commission, just as interest rates are set by another independent body”.
However, Labor’s employment Spokesperson Brendan O’Connor has criticised the Government for failing to reject the proposal, stating that “If Malcolm Turnbull and this government does not want to support cutting penalty rates, then they can reject the recommendation of the Productivity Commission”.