Jobs impact of penalty rate cut queried

The jury is out on whether a decision by the Fair Work Commission to cut penalty rates in some sectors will boost employment.

Unions and employer groups say the decision to cut penalty rates will only have a modest, if any, impact on job creation.

The Fair Work Commission on Thursday ordered a cut to penalty rates for hospitality, fast food, retail and pharmacy workers.

The commission said in its decision there were likely to be "some positive employment effects" from the cut, but these effects were "likely to be reduced due to substitution and other effects".

"Substitution" can include such things as part-time workers replacing full-time and younger workers replacing older employees, as well as new technology such as self-service kiosks replacing staff.

ACTU president Ged Kearney said the idea that cutting penalty rates would create jobs is a "complete furphy".

"People whose pay is going to be cut will simply have to work more hours to make up that take-home pay," she told reporters in Melbourne.

"It will put more pressure on the labour market. It will simply mean people whose pay have been cut will have to work more hours, work longer shifts."

Australian Retailers Association director Russell Zimmerman said it would be "hard" to estimate how many jobs could be created.

"Even the (Fair Work Commission) president said that today," he said.

"But they do believe, as we believe, and as we have been told from our retailers, that retailers will offer extended employment to people."

Council of Small Business Australia chief Peter Strong said it would make it easier for businesses to hire more staff.

"University students, people who look after kids during the week and want their own money - now they have the opportunity," he said.

"There will be more jobs. It might not be a lot, it might be 10,000. We don't know how many but we'll find out."

The main effect could be casual employees being offered part-time work and part-time workers offered full-time jobs, he said.

Employment Minister Michaelia Cash told reporters in Perth on Wednesday she was pleased to hear employer groups saying it would have a positive impact on jobs.

Asked whether she expected a noticeable drop in the jobless rate and underemployment, she said: "Certainly, not overnight."

But she said many employers - especially in rural and regional areas - would now be able to open on a Sunday, which would either provide more work for the under-employed or create a new job.

Source AAP

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