Awards and penalty rates are onerous, outdated and should be abolished, according to a new report from The Centre for Independent Studies.
The award system is a barrier to employment and should be replaced by the existing national minimum wage and statutory conditions, says Mr Philipatos, policy analyst and author of Relics of a Byzantine IR System: Why Awards Should Be Abolished.
Award modernisation has seen 3,715 awards condensed into 122 industry awards, a process that has increased operational costs on businesses as many awards have been factored up to meet then Workplace Relations Minister Julia Gillard’s pledge that no worker would be made worse off.
‘The award system is defunct in the modern operating environment,’ argues Mr Philipatos.
‘Australian businesses are suffering from increasing online competition, yet they are restricted by high operating costs such as burdensome penalty rates and foregone employment opportunities.’
‘Small businesses are increasingly shutting their doors on weekends and public holidays rather than paying penalty rates of up to 2.5 times their employees’ normal wages.’
‘Abolishing the award system does not mean workers will be left unprotected,’ Mr Philipatos stresses.
Australian workers are protected by the minimum wage and standards set out in one of the most generous safety nets in the world, with our federal minimum wage ranked fifth highest among OECD nations.
Abolishing awards also does not mean pay rates are restricted to the minimum; on the contrary, abolishing awards would give employers and employees/unions the freedom to negotiate beyond the minimum standards to find wages and conditions acceptable to both parties.
‘Tony Abbott has missed an opportunity to address key problems in the labour market and the Fair Work Act in his industrial relations policy. He should commit to a single standard for all employers and to abolishing the outdated awards system,’ says Mr Philipatos.
‘With unemployment rates expected to increase this year, job creation and flexibility in the labour market are vital. These can be accomplished if we remove the burden of the award system.’
Alexander Philipatos is a Policy Analyst at The Centre for Independent Studies. He is available for comment.
The CIS report, Relics of a Byzantine IR System: Why Awards Should Be Abolished, to be released on 23 May, is available at the CIS website.
A Snapshots document is also available online.
Mr Philipatos discusses the findings of the report in this YouTube video.