Labor leader Bill Shorten says a deal between South Australian business and the union representing retail workers that could see penalty rates traded for an overall wage rise demonstrates the current industrial relations system is working.

The deal has also been hailed by Employment Minister Eric Abetz, who has applauded the “constructive approach” to enterprise bargaining, while business groups have urged a similar trade-off to be adopted nationally.

The template voluntary agreement could then be adopted by up to 40,000 retail employees in the state and potentially has implications across the country. It comes as business groups such as the Australian Chamber of Commerce and Industry push for a reduction in penalty rates and the Productivity Commission reviews the workplace system.

Retail workers could trade off penalties for other benefits under the deal. Photo: Glenn Hunt
Under the deal, a full-time shop assistant would earn about $760 a week, up from $703.90 – a rise of about 8 per cent.

Tea breaks would be extended from 10 to 15 minutes, work on Sunday and public holidays would be 100 per cent voluntary – which is not the case at the moment – and permanent workers would have the right to two weekends off in every four, a right not enjoyed at the moment.

In exchange, penalty rates after 6pm and on Saturday would be cut from 25 per cent to nil, Sunday rates would come down from a 100 per cent loading to 50 per cent, and public holiday rates would come down from 150 per cent to 100 per cent. The proposed enterprise agreement has also been simplified from 72 pages to 33 pages.

Mr Shorten said the proposed agreement had been struck under the current Fair Work laws, giving lie to claims from the federal government and some sections of business that the current system was a brake on productivity.

“I’ve spoken to the lead of the Shop Assistant’s union [the SDA] overnight, this is the proposal he’s enunciated, they’re looking at trimming some of the penalty rates on the weekend. They’re not getting rid of penalty rates. Let me be clear, they’re increasing the overall base rate of pay.

The deal “demonstrates the strength of the current system of unions and employer groups working together”, he said. “We know the Abbott government can’t sit down with unions. We know they’ve never supported a serious wage rise.
“So I like what I’ve seen of today’s deal in terms of the retail industry in Australia but for me the lesson is you can do it in the current system, and if your focus isn’t cutting workers’ pay overall – trying to get the right balance – it’s a win-win.”

Senator Abetz said the deal highlighted “the benefits of encouraging workplaces to sit down and negotiate terms and conditions that suit their specific needs”.

Setting penalty rates is a matter for the Fair Work Commission, but if workplaces can arrange a better deal on which they agree that complies with the law, they should be encouraged to do so,” he said.

The Australian Chamber of Commerce and Industry said it hoped other states would mirror the South Australian deal, as well as generate jobs.

“This deal can provide a workable example for other employers and unions across the country keen to overcome the barrier to growth posed by penalty rates. We are hopeful agreements like this can flow across Australia,” ACCI chief executive Kate Carnell said in a statement.

The Australian Retailers Association said it hoped the deal would be pushed out nationally.

“We’d be hoping that we see this kind of deal rolled out nationally,” ARA executive director Russell Zimmerman said.

“We’re seeing that unions really do now understand that Sunday penalty rates at 100 per cent are unsustainable and it’s a decision that will help the industry. It’s a good start, in the right direction.”

The system is being lauded as a solution to a major cost burden for bricks-and-mortar retailers, struggling to compete with online shopping.

Business SA says it will expand retail employment opportunities, particularly among smaller retailers.

The union says it’s always been willing to negotiate with employers as long as workers don’t end up worse off.

“This template agreement demonstrates how this can be done successfully for small retailers,” SDA state secretary Peter Malinauskas told the ABC.

ACTU secretary Dave Oliver said the bottom line was that business groups still wanted to take penalty rates from workers “in exchange for a big fat nothing”.

“Whether you are a nurse, a firefighter a retail or hospitality worker, if you work nights or weekends, we believe you should get compensated for that and that’s what our community supports,” he said.

Extracted in full from The Canberra Times.