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Higher pay rates could replace penalties

AAP logoAAP 29/09/2016

Small business is buoyed the industrial umpire boss has flagged merit in replacing penalty rates for retail and fast food chain workers with higher hourly pay rates.

The Fair Work Commission president Iain Ross has acknowledged a need for greater flexibility for small business.

"It will happen, there is no doubt it will happen, it's a matter of when. This is about simplicity," Council of Small Business of Australia chief executive Peter Strong told ABC radio on Friday.

Business is keen to push the case for a 25 per cent increase in ordinary pay rates in exchange for doing away with penalty and overtime rates.

Mr Strong supports a single higher hourly base rate operating across seven days as a simple alternative to the existing system.

"What it adds is flexibility and simplicity, which is what we have always wanted," he said.

ACTU secretary Dave Oliver told The Australian unions would be "very cautious about any proposal like loaded rates because the potential for individual employees to be worse off is very high".

"One size does not fit all and workers are always left behind in the quest for simplicity," he said.

Prime Minister Malcolm Turnbull said the issue was a matter for the independent umpire and the government had not commented on the commission's review.

"We don't have a plan or a policy to change policy rates," he told Neil Mitchell on 3AW radio.

Labor supports the retention of weekend penalty rates, even though some unions have bargained them away in return for higher rates of ordinary pay.

The commission is expected to agree to some reduction in Sunday penalties when it hands down its decision later in the year.

The question of so-called loaded rates - negotiated by major retailers and fast-food chains in contentious enterprise agreements to replace penalties - being included in retail and awards won't be addressed until 2017.

But Justice Ross has hinted the commission could go down that track, saying it should be possible provided there were appropriate safeguards.

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