Update On Saturday and Evening Penalty Rates Application by SDA September 2018
In the final stages of the hearing the SDA presented its expert report from Professor Borland, whose evidence was solely directed to an estimate of costs across the entire industry. His estimate was that the impact of the increases in weekday evening and Saturday casual penalties would be “relatively small”. There were issues with both the assumptions that underpinned his calculations and the actual calculations themselves, and we expect that the Decision in the matter will reflect that his calculations are not reliable.
From our side we had one of our lay witnesses withdraw from the proceedings shortly before the Hearing, which was disappointing as they had some very persuasive evidence to give, particularly around the impact of the change on young people. This meant we were limited to our expert, Dr Sands, three retail business lay witnesses and two retail employee lay witnesses.
Dr Sands performed well, although there were some limitations in his report. The most significant of these was that because of the limited time we had to engage the survey aspect there was insufficient time to run through the protocols that would enable the survey to include persons under the age of 18. The report itself gave us some very persuasive evidence, in particular around differences between the attitudes to evening and Saturday work between casual and permanent employees, as well as their willingness to take on additional work at these times. It also highlighted that a significantly higher proportion of casual evening and Saturday workers were studying when compared with permanent employees working at the same times.
The negative aspect of the research for us was that in a couple of the key disutility measures (ability to spend time with family and to socialise) casual employees reported higher levels of disutility when compared to permanent employees. Unusually, however, casual employees were significantly more likely to cite flexibility around life commitments as a benefit of evening and Saturday work.
The lay witness evidence went reasonably well, save for some issues with the calculations they had prepared in relation to reductions in hours. One of the more pleasing aspects of the evidence was that the SDA sought to challenge the witnesses on the link between labour costs and hours rostered and came off second best. Two of the three employers said that they had increased hours on Sundays as a result of the reduced penalty rates, and one said they had reduced hours as a result of the latest minimum wage increase.
In terms of the employee lay witnesses the SDA sought to test their understanding of the benefits of permanent employment in order to challenge their evidence that they preferred casual employment. Both stood up really well to this, remaining steadfast in their view that they prefer casual employment.
It was difficult to get much of a read on the Full Bench (President Ross, Vice President Hatcher and Commissioner Lee). The thrust of our argument was that the SDA, if they want such a substantial case, need to mount a positive case, and all they had done was provide fairly “flimsy” evidence of a negative aspect, being the cost of the changes.
Next steps
In a very clear sign that the Commission is seeking to move very quickly with this, we were asked to provide submissions within a week on any proposed transitional provisions (assuming changes are made either to the casual evening and Saturday rates or to the Sunday Shiftworker rates which we were pursuing). We filed submissions on this on Friday, proposing that the Shiftworker changes be implemented in the same way as the other Sunday penalty rates, meaning:
Full-time and part-time employees
1 July 2019 200 per cent -> 195 per cent
1 July 2020 195 per cent -> 185 per cent
1 July 2021 185 per cent -> 175 per cent
Casual employees (inclusive of casual loading)
1 July 2019 225 per cent -> 220 per cent
1 July 2020 220 per cent -> 210 per cent
1 July 2021 210 per cent -> 200 per cent
In relation to casual rate increases we proposed a five stage transition, in part on the basis that unlike employees, employers cannot be insulated from the changes by minimum wage increases. We proposed:
Weekday Evening Penalty Rates (inclusive of casual loading)
1 July 2019 25% -> 30%
1 July 2020 30% -> 35%
1 July 2021 35% -> 40%
1 July 2022 40% -> 45%
1 July 2023 45% -> 50%Saturday Penalty Rates (inclusive of casual loading)
1 July 2019 35% -> 38%
1 July 2020 38% -> 41%
1 July 2021 41% -> 44%
1 July 2022 44% -> 47%
1 July 2023 47% -> 50%
Naturally, the SDA has proposed no transitioning for casual penalties, submitting that employers have been benefitting from an anomaly for some considerable time.
Reply submissions on transition are due to be filed this coming Thursday. Given the Commission is committed to completing the Review prior to the end of 2018 and has advised that remaining GRIA matters will be dealt with once this matter is finalised (including our part time application) we expect a Decision to be issued in late September or early October at the latest. We are not confident of success, but consider we have a better chance with evenings that Saturdays and can be almost certain that there will be some transitional provisions implemented.