Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Why I am not embracing the reduction in penalty rates

Mark Fletcher
July 3rd, 2018 · 5 Comments

Penalty rates under the award that applies to newsagency businesses were cut further from July 1. This means we could pay people less to work on a Sunday. In March last year I wrote about why I was not embracing the first cut in penalty rates introduced by the Liberal/National government. I have reviewed what I wrote then and share it today to reinforce the decision I have made to not apply the second penalty rate cut…

Here are my reasons for deciding to not embrace the Sunday penalty rates decision in my retail businesses:

  1. I value my employees. To pay them less as a result of the decision could suggest to them they are worth less. I have hated it when suppliers reduced margin or commission and argued then that they value me and my business less.
  2. I want to be competitive for good labour. Paying a competitive rate is key to this.
  3. The business reward. It is open to employees who are now told their pay will not be cut to return the favour to the business.
  4. Competition. A range of competitor businesses have made a similar announcement.
  5. While of economy fairness. While I agree with the decision in penalty, it should only be taken as a whole of economy review that fairly adjusts economic touch-points for all and not only casual PAYG  workers.
  6. Weighing everything up, not applying the pay cut it is the right thing to do.

This is not a permanent decision. It is possible I will modify my position as the marketplace situation evolves. If I did and thereby embraced a saving in labour costs, I anticipate savings would be invested in more hours.

All business owners need to reach their own conclusions on this matter. Unfortunately, as a country we are bereft of leadership on broader issues that should be confronted in any economic setting adjustment as has been done with Sunday penalty rates.

There will be some here who will say I own multiple businesses and subsidise my newsagencies. This is not the case.

My hope is the decision to not cut penalty rates is met with a commitment by team members to drive revenue and thereby help the business afford the higher labour cost.

12 likes

Category: Newsagency management

5 responses so far ↓

  • 1 Jim // Jul 3, 2018 at 11:11 AM

    You do all this and still run at wage costs around 10% of sales as you suggest as a benchmark? Hmmm…not convinced this all adds up.

    2 likes

  • 2 Mark Fletcher // Jul 3, 2018 at 11:26 AM

    Jim I don’t care if you believe me or not.

    By all this I guess you mean pay the Sunday penalty rates as they were 18 months ago. The business cost different is around $5,000 a year.

    1 likes

  • 3 Jim // Jul 3, 2018 at 1:19 PM

    Everyone.. mark pays above penalty rates!!! Stand and applaude. What a great guy!!!

    6 likes

  • 4 Mark Fletcher // Jul 3, 2018 at 4:56 PM

    I’m not alone Jim, not by a long shot. Go be angry somewhere else.

    3 likes

  • 5 Peter // Jul 4, 2018 at 9:20 AM

    Mark, on this issue I agree with you entirely.

    0 likes

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