Industry, unions divided over “complexity” of award system

A review of the award system to take place next year has been hailed by industry groups as a necessary step to achieve a simpler and more user-friendly General Retail Industry Award and reduce the incidence of underpayment in the sector. 

“I don’t think anyone can deny our Modern Award is complex,” Dominique Lamb, the chief executive of the National Retail Association (NRA), told Inside Retail Weekly

“The reality is it will serve everyone – both employers and employees – to have a really clear understanding of their obligations.” 

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The announcement of a review of the award system, made last week by Attorney-General Christian Porter, follows a recent decision by Labor senators to launch a parliamentary inquiry into the root causes of wage theft amidst continued admissions of underpayment in the retail and hospitality sectors. 

Large businesses including 7-Eleven, Domino’s, Michael Hill, MJ Bale, Super Retail Group, Lush, Bunnings Warehouse and Woolworths collectively have been forced to back pay workers hundreds of millions of dollars in recent years for what many said were unintentional payroll mistakes due to the complexity of the Modern Award. 

“Many retailers would welcome reform to the retail awards to simplify what is a complex system for everybody,” Matt Jensen, the founder and CEO of MJ Bale, said in July, when the retailer back paid staff approximately $500,000.

A whole raft of complex issues

According to Lamb, the General Retail Industry Award is 54 pages long, contains 1000 different pay classifications and is particularly difficult for small and medium businesses to navigate. 

Even large businesses that have in place Enterprise Bargaining Agreements, which they negotiated themselves, can still fall afoul of the Modern Award, Lamb said. 

“When you have historical EBAs that have been going for a long period of time, and there have been changes to the award, over time the benefit to the worker [of those EBAs] becomes eroded,” she said. 

“You can have businesses that are big enough to have collective agreements, but not big enough to know they need to update it according to the award. There’s a whole raft of complex issues in the EBA space.”

Porter, the Morrison government’s Industrial Relations Minister, said in a statement that supporting small business would be a particular focus of the review. Few other details about the review have been provided. 

This has left those organisations representing retail and hospitality workers concerned that the review will prioritise businesses over employees. A spokesperson for the Shop, Distributive and Allied Employees Association (SDA) called it a “smoke screen” to further cut employee entitlements.

“This announcement is a thinly veiled attack on the Retail Award which was modernised in 2010 and has been the subject of ongoing Award Review proceedings since 2012,” the spokesperson told Inside Retail Weekly

“If the industry spent as much time ensuring payroll systems were accurate as they have spent attacking the Retail Award, we wouldn’t have had the large underpayments seen across the industry over the last two years.”

Josh Cullinan, secretary of the Retail and Fast Food Workers Union (RAFFW), told Inside Retail Weekly that the awards are already a “weak shadow” of what they once were. 

“We can’t dream up what they would [simplify],” Cullinan said.

But Lamb said these fears are based on a false assumption of the structure and purpose of the review. 

“The reality is there will be a significant process to get through [to change the award system],” she said, “and the unions will have the ability to present their ideas. They will be included in these consultations.”

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