Analysis: Businesses arguing for penalty rate cut should address executive pay first
By business reporter Andrew Robertson
Posted Tue 13 Oct 2015, 2:55pm
The debate over Sunday penalty rates is intensifying under new Prime Minister Malcolm Turnbull.
Unions are threatening a campaign which they claim will dwarf their successful anti-WorkChoices battle which contributed to much to the downfall of the Howard coalition government in 2007.
The arguments of course have been well documented.
Businesses of all sizes think they can make more money if they pay their staff less for working on Sundays.
Unions say penalty rates are compensation for being asked to give up valuable weekend family and social time.
The interesting thing is that many of those at the forefront of the campaign to cut penalty rates do not apply the same logic to themselves.
I'm talking about the executive equivalent of penalty rates, which are the ubiquitous bonuses.
No self-respecting executive of a publicly listed company would turn up for work if all that was on offer was base salary — even if that salary is $2 million or $3 million a year.
If you want your executive to do any work when he or she is sitting at their desk, they need a bonus.
And most get their bonus, it seems, no matter how the company has performed, as a glance through the remuneration reports of almost any company reveals.
The line between base salary and bonus has become very blurred.
This author well remembers a terse exchange with the chairman of BlueScope Steel a few years ago for questioning why the chief executive had been paid a six-figure sum for handling negotiations with the federal government over the carbon tax.
When I dared to suggest that surely that was just a normal part of the job, I was quickly slapped down.
The fact that BlueScope had lost $1 billion that year and was still paying bonuses was something the chairman also did not want to discuss.
Which brings me back to Sunday penalty rates.
As I've noted, workers argue they need extra compensation for giving up time with their family and friends on weekends.
It's the penalty rates, they say, that encourage them to turn up for work on Sundays and perform at their best.
In mahogany row, executives argue they need bonuses to turn up and perform during the week.
Without their multi-billion-dollar bonuses, so it goes, their work will not be as good.
In fairness, no-one objects to genuinely outstanding work being rewarded, but executive excess is well documented.
As recently retired Telstra boss David Thodey admitted in a refreshing piece of salary honesty, there is no way he can justify the millions of dollars that have been showered on him.
To be fair, penalty rates can make life tough for small businesses in particular.
Mixed up with that though is the fact that many shops and restaurants are forced by landlords like Westfield to open on Sundays when they would rather be closed.
That is a separate issue that needs to be addressed.
Then there is the student issue, and there is merit to the argument that on the whole they do not care what day of the week they work. They are just happy to work.
But is cutting their pay the answer?
As Mr Thodey let slip, executives know they are receiving far more than they are worth.
There may well be a case for lower weekend penalty rates for those at the bottom of the corporate ladder.
The case would have more merit if those with the loudest voices from the big end of town led from the front and addressed their own inflated pay first.
