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Customers Hit With Public Holiday Surcharge Despite Penalty Rate Cuts

Customers hit with public holiday surcharge despite penalty rate cuts

Many inner city cafes and restaurants charged customers a public holiday surcharge today, despite recent cuts to penalty rates for hospitality staff.

Since July 2017, workers in hospitality have had their weekend and public holiday penalty rates slashed by 15 percent, yet customers at cafes and restaurants were still being slugged with a 10 to 15 per cent surcharge on Easter Monday.

Cuts have not produced jobs or economic growth

The Fair Work Commission announced the first round of penalty rate cuts of 5 per cent for workers in hospitality, fast food, retail and pharmacy in July 2017.

A year later, hospitality workers had their weekend and public holiday penalty rates reduced by a further 10 per cent, bringing the total reduction to 15 per cent – the same rate many customers were being charged today in the form of a surcharge.

The FWC and business groups argued at the time that the cuts would create jobs and create economic growth – two things that have not happened as a result of the cuts.

In fact, research shows that since penalty rates were first cut in 2017, thousands of full-time jobs have been lost in the retail and hospitality sectors.

According to the Australian Bureau of Statistics, 50,000 full-time jobs have gone in retail, challenging the industry’s argument that a reduction in penalty rates would create more jobs and more hours of employment.


Industry says penalty rate cuts don’t cover costs

Predictably, the Australian Industry Group told Nine Media that “it is not surprising that many businesses still charge public holiday surcharges” because they were still paying penalty rates – even though they are at a much reduced rate.

Australian Chamber of Commerce and Industry CEO James Pearson told Nine that the surcharge was still in place because the penalty rate cuts were being phased in over four years.

“We are only half way through that and penalty rates are still significantly higher on public holidays than on other days of the week,” he said.

The public are being conned

Industrial relations expert Miles Heffernan from Industrial Relations Claims scoffed at that argument, and said the public are being conned.

“Businesses are double dipping – they are paying their staff less and less each year, but are still charging their customers through the nose using penalty rates as an excuse,” he said.

“No one should believe the bullshit being spun by business groups that cuts to penalty rates create jobs and grow the economy – because there is absolutely no evidence to support such claims.

“And now they want us to believe that restaurants and cafes still have to charge their customers 10 to 15 percent more on a pubic holiday, even though they are now paying their staff 15 percent less in penalties – you do the math – it doesn’t make sense.

“The evidence suggests that all businesses are interested in is maximising their profits, and they are being dishonest with their customers by blaming penalty rates for the extra surcharge on public holidays.”

Bill Shorten’s Labor Party has pledged to reverse the penalty rate cuts if elected in May.


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