Leo D'Angelo Fisher Columnist

Leo covers management and leadership issues, business trends and corporate strategy. He is a former senior business writer at The Bulletin and a former host of The Business Hour on 3AW.

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The high cost of weekend penalty rates

Published 09 October 2012 13:21, Updated 10 October 2012 04:51

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Quadrant Australia, an Armidale, NSW-based specialist travel business that organises agribusiness study tours and trade missions to rural and regional Australia, is feeling the pressure of weekend penalty rates – even though its small team of salaried employees does not attract penalty rates.

“This is not something that affects us directly in terms of our wages bill, but weekend penalty rates are affecting our business because [overseas clients] will just not pay what we have to ask because of the combined affect of penalty rates, the GST and the high Australian dollar,” says Quadrant executive director Peter Lloyd.

Weekend penalty rates, which can add 100 per cent to the hourly wage rate on a Sunday, are a contentious issue as many businesses – particularly retailers, cafes and restaurants, fast-food outlets, pubs and tourism operators – struggle in a skittish economy.

Penalty rates are being studied as part of the Fair Work Australia review of the federal government’s modern award system, introduced in 2010, which standardised penalty rates in several sectors nationally.

Quadrant’s experience illustrates that it’s not just the direct impact of weekend penalty rates that hurts businesses. The knock-on effect can be just as damaging.

In one example, Lloyd says a business group from South America which visits Australia annually called off its trip this year when it compared the cost of $10,000 per person for a 10-day visit to Australia with $7000 to the United States.

As well as overseas travellers frowning on the high cost of travel to Australia, weekend penalty rates are affecting the level of service Quadrant is able to offer those visitors that do decide to make the trip.

Lloyd says escalating wages for casual employees on weekends means that when Quadrant takes tour parties through regional towns and cities, many cafes and restaurants aren’t open – much to the bemusement of the overseas visitors.

“When an international [tour party] comes to Australia, to them, whether it’s Saturday, Sunday or Monday makes no difference,” he says. “If they want to have lunch or a cup of coffee they expect to be able to do so.

“We’ve got some delightful coffee shops in Armidale but on Saturdays they close at noon and on Sundays they don’t open at all because penalty rates make it too expensive for them. It’s impacting on regional centres across the country. If you go to Echuca, Beechworth or Dubbo, there are some great places to eat but on the weekend they’re all thinking twice about whether they can afford to open.”

Lloyd says that when planning itineraries for travel parties on weekends, organisers have to “fairly carefully” factor in whether visitors can have coffee and meals during stopovers.

One way around cafes and restaurants that choose not to open on weekends, or Sundays in particular, is to make arrangements with volunteer groups such as the Red Cross and the Country Women’s Association to put on lunch or afternoon tea for visiting parties. It may not be gourmet coffee on offer for fussy international visitors but it’s a welcome fund-raising opportunity for local community groups.

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