Last week’s Federal Court judgement regarding the underpayment of salaried workers under the General Retail Industry Award (GRIA) is likely to increase the cost and compliance burden on retail businesses, including SMEs, the Australian Retailers Association (ARA) warned.
According to ARA CEO Chris Rodwell, the emerging impacts of the ruling on the broader sector are alarming.
He believes “practically unworkable” salaried arrangements will hamper Australia’s efforts to lift productivity, creating a “heavier regulatory burden for businesses already drowning in red-tape”.
One example is the future distinction between hourly paid and senior salaried employees.
“Salaried team members who are paid above $90,000 per year must be treated in the same way as a more junior worker who is paid hourly,” Rodwell said. “This will likely push retailers of all sizes to stop preferencing salaried arrangements, which undermines secure employment and career choices for retail workers.”
He continued: “Requiring senior employees to clock on and clock off, measure breaks and be given no discretion or autonomy to decide when they need to work extra hours is not only a significant compliance burden, it further restricts flexibility in a way many will not welcome.”
Further examples include the fact that senior salaries cannot be offset on an annual basis, as is allowed under many industry awards, and that the span of ordinary hours needs to be assessed on a store-by-store basis for every retailer around the country.
“With 994 different pay rates across almost 100 pages, the GRIA is incredibly difficult for employers to understand,” Rodwell said.
“It is clearly not fit-for-purpose for larger employers. The expectation that smaller mum-and-dad operated businesses, who lack legal and HR resources, can use the award appropriately is entirely unreasonable,” he added.
The ARA will continue to advocate for solutions that will make the retail award easy to understand while delivering choice and flexibility to employees.
Last week, Justice Nye Perram released an 82,000-word judgment ruling that Coles and Woolworths had failed to keep accurate employment records.
The Fair Work Ombudsman (FWO) commenced proceedings in December 2021, alleging the companies underpaid their salaried managers in breach of the GRIA and the Fair Work Act.
The two supermarket giants estimate a combined $1 billion in remediation obligation as a result of the court decision. The exact amount is expected to be determined during a case management hearing next month.
This article was first published on sibling website Inside Small Business.
