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The penalty rate incorporates the rate of pay that is granted to the employees for the services that are being provided under difficult conditions or unusual timeframe. The penalty rate is provided when employees work during weekends, overtime, night shifts, early morning shifts or public holidays. The penalty rate has been reduced as a strategic decision to increase jobs by means of providing opportunities to the new employees rather than dividing work within the existing employees (Daly, 2014). The current paper enlightens the dynamics of the penalty rate that tend to justify the penalty rate and analyzes the prevalence of penalty rate in accordance with the perspectives of the employer associations.
The penalty rate provides the employees with the opportunity to enhance their earnings by means of getting paid at a higher wage. According to the delegates of the Shop Distributive and Allied Employee Association (SDA), the restriction on the penalty rate is incorporated to enhance the economic activities. It is argued that the economy is regulated in an effective manner when penalty rates are not paid. However, this strategy is considered as a threat for the wellbeing of employees due to the employers’ ability to standardized the wage rage and incorporate the same level of productivity at the minimum cost (Kunz, 2015).
In this instance, the delegates of SDA encompass the notion that as a result of this strategy, the base pay is required to be increased for the employees. Moreover, it is also proposed that the employees should be given the right to refuse their shifts that are beyond the basic working hours (Kunz, 2015). The employer associations, specifically the Restaurant and Catering Australia (RCA), has accepted the change in the decision of offering the penalty rate on account on increasing the employment opportunities (Kunz, 2015).
It has also been argued by the SDA that this change will increase the number of applicants for the available jobs due to which the organizations will have more skillful candidates, which will eventually increase the quality offered by the organizations. This decision by the employers has also been enlightened in accordance with the perspective that small businesses tend to shut down their business operations on weekends in order to avoid extra pay to their workers. However, cuts in the penalty pay will provide the small businesses with the opportunity to increase the duration of their business operations, which will eventually yield profits for the small business, resulting in a boost in the economy (kunz, 2015).
The employer association of the ASX Brickworks has also supported the decision incorporating the cuts in penalty rate. The support is encompassed on account of the argument which indicates that the difficulty of work and working conditions for the employees remain same regardless of the night or morning shift. In this manner, the same extent of pay level is not required to be paid at a higher extent specially when employees agree for overtime or want to work during night or early morning shifts according to their free will (Desloires and Dunckley, 2015).
It has also been argued that the profitability of the Brickworks has been challenged due to the high cost of production and high competition in the market. The cuts in penalty rates will result in the low cost of production due to which the businesses can acquire the cost advantage due to the low cost of production during the weekends. The decision of cuts in penalty rates is considered as a growth strategy to foster the local industries so that a competitive advantage in the global and local markets can be acquired in an effective manner (Desloires and Dunckley, 2015).
The focus on the profitability of the business by the employers has incorporated the implementation of the managerial prerogatives, in which the employers consider the control on their employees as their right in order to enhance the productivity and profitability of their business. The employers encompass the prerogatives on the basis of their property rights and economic efficiency and hence, in the case of penalty rates, it is considered to be related to the economic efficiency that the employers can achieve from cutting off the penalty rates from their compensation system. However, the managerial prerogatives have been questioned by the manager’s accountability and inclination towards the profitability of the organization rather than the wellbeing of the employees (Emmenegger, and Marx, 2011).
The industrial relations that are considered favorable by the employers address the high extent of productivity by means of the cost efficiency. In this manner, it is indicated that employers want to enhance their profitability while keeping their costs of production low, which eventually reduces the margin for administrative expenses that covers the compensation budget. The employers tend to incorporate the industrial relations in accordance with the managerial prerogatives so that their business prospects remain favorable for the long-term (Donaghey et al. 2011).
The industrial relations address the employees’ salary and compensation packages, working conditions and ethical human resource practices implied by the employers. The industrial relations address the wellbeing of the employees by means of conflict resolution in an effective manner. However, the current industrial system is also focused on the implementation of the technological adaptions, career opportunities and attractive compensation plans. The current human resource management system is focused on the implementation of the high performance work systems, which help in the implementation of the HR practices in an effective manner (Poole, 2013).
The high performance work systems increase the transparency in the organizational procedures due to which the concerns of the industrial relations can be addressed in an effective manner. The employers are focused on the cost efficiency and hence, the implementation of the high performance work systems ensures the cost efficiency due to the automated and simple procedures. The high performance work systems reduce the turn around time for the operational activities due to which the work tasks become time consuming, which eventually increases the moral of the employees and also increases their motivation towards performing the jobs tasks (Gittell et al. 2010).
The reduction in the turn around time also indicates the consumption of less raw material and sources including the number of employees required to work for extra wage. In this manner, the employers can acquire the cost efficiency and can acquire higher profits whereas, the implementation of the high performance work systems makes the work procedures less complex and effective. The industrial relations in this instance, also want to reduce the working hours or increase the base pay of the employees and hence, making the work activities simpler, the agreement between the both parties can take place regarding the newly developed working hours and compensation strategy (Appelbaum, 2013).
The current industrial relation system is able to encourage the effective human resource practices because the benefits of the effective and competitive HR reduce the prevalence of unethical activities at the workplace. In this manner, industrial relation organizations and human resource can develop such strategies that can result in the agreement on account of the common ground that ranges between the IR organizations and employee unions. In this manner, the high performance work systems can enhance the productivity by means of reducing the profitability and hence, IR system and HRM can integrate in order to implement the high performance work systems enhance their economic efficiency (Gittell et al. 2010).
REFERENCES
Appelbaum, E., 2013. The impact of new forms of work organization on workers. Work and Employment in the High Performance Workplace, 120.
Daly, T., 2014. Evenings, nights and weekends: Working unsocial hours and penalty rates (Doctoral dissertation, Centre for Work+ Life).
Desloires, V. and Dunckley, M. 2015. Employers step up efforts to get rid of penalty rates. The Sydney Times – Business Day. Retrieved from: http://www.smh.com.au/business/employers-step-up-efforts-to-get-rid-of-penalty-rates-20150102-12gylv.html
Donaghey, J., Cullinane, N., Dundon, T. and Wilkinson, A., 2011. Reconceptualising employee silence problems and prognosis. Work, Employment & Society, 25(1), pp.51-67.
Gittell, J.H., Seidner, R. and Wimbush, J., 2010. A relational model of how high-performance work systems work. Organization science, 21(2), pp.490-506.
Emmenegger, P. and Marx, P., 2011. Business and the development of job security regulations: the case of Germany. Socio-Economic Review, p.mwr013.
Poole, M., 2013. Industrial relations: origins and patterns of national diversity(Vol. 4). Routledge.
