The National Retail Association (NRA) welcomes the Australian Industrial Relations Commission (AIRC)’s decision to make use of the new retail award’s full five-year transition period for increases to penalties and wage rates, but still questions why there have to be any labour cost increases at all.
“While today’s decision by the Australian Industrial Relations Commission to phase in labour cost increases resulting from the award modernisation process will slow down the rate of increase in labour costs, it fails to answer the fundamental question about why there should be any labour cost increases at all,” said NRA’s executive director, Gary Black.
The AIRC decision follows last week’s announcement by the Deputy Prime Minister that the government would not instruct the AIRC to alter the proposed retail and fast food modern awards to ensure that increases in labour costs do not result.
According to Black, the transitional decision confirming substantial labour cost increases, and the Deputy Prime Ministers refusal to intervene and prevent substantial labour cost increases, makes it clear that employers have been deceived over the award modernisation process.
In the circumstances unprecedented labour cost increases are now almost certain to be inflicted on many employers over a period when unemployment is rising and the Australian economy is experiencing recessionary conditions. Job opportunities for young people will be the major casualty as fast food employers and retailers curtail their hours of operation and try to limit the increase in labour costs.
While the transitional provisions will mitigate the impact of the labour cost increases they do not alter the fact that over the five-year transitional period the labour costs of some fast food employers will be increased in total by amounts between 20 and 30 per cent plus the annual general wage increases to be awarded by Fair Work Australia. Given that these latter increases will be in the order of four per cent per annum, this means that these particular small businesses will be confronted with annual labour costs increases for the next five years of around eight to 10 per cent per annum.