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Penalty rates at my local pub

BombayBicycleClubFrontIt’s all so very predictable. In his usual sloppy and insipid way, Tony Abbott is trying to bring on an industrial relations war with unions by blaming SPC Ardmona’s request for government assistance on over-generous wage and employee entitlements in the company’s Shepparton factory. Even when SPC Ardmona corrected the record by releasing their workers’ enterprise agreement, and even when local member and self-appointed SPC guardian, Liberal MP Sharman Stone called Abbott out for lying about the issue, Abbott still trudges forward seemingly unwounded. On behalf of his mates at the top end of town, Abbott is working towards their end goal, where business owners can treat their workers however they want, and can pay them however little they want. It’s all the workers’ fault if they complain, because apparently they should feel gratitude for having a job at all. And this despite that fact that that workers’ share of national income has been falling since 2000.

Despite the growth in their share of the national income, business owners and shareholders still want more. Always more. One way to get this is to reduce wages by any means possible. This is why business owners obviously want one objective of any wage negotiation between unions and business to be the removal of penalty rates for working unsociable hours. As chief friend of business and foe of workers, Tony Abbott has embraced this mission; his government has asked for a major review of workplace awards to assess whether minimum terms and conditions, including penalty rates, are still relevant.

I’ve recently come across a local example where a business owner’s displeasure at having to pay penalty rates generated bad publicity at what happens to be my local pub – the Bombay Bicycle Club. I’ve spent quite a bit of time there at a mid-week pub quiz or for a weekend beer and curry. Recently, the pub has undergone a major renovation, with the addition of a large car park and upgrades to the drive-through bottle shop, main bar and restaurant area, a new beer garden complete with fake palm trees, and a meticulous refresh of the incredibly flamboyant British Raj Indian theme. I don’t know how much the building works and interior decorating must have cost, but suffice to say they would have spent more money in the female bathrooms than I am currently spending renovating my whole house.

This article on news.com tells how the pub owner erected an expensive mounted wooden menu in the public bar. This showed how much the meals would cost if he multiplied them by the 2.75 award rate of loading his staff receive for working on a Sunday. It doesn’t take an economist to work out the flaw in this argument, because of course labour costs are just one of many cost inputs that make up the supply of a pub meal. After a backlash on social media, the sign was taken down. The owner was quoted as saying:

“Again, WOW. The sign has been removed. Have read all your comments. I will keep my opinions to myself in the future.”

Apparently the business owner was surprised that his clientele weren’t impressed with his attitude. It’s not clear how his staff, the ones earning penalty rates for working on a Sunday, felt about having to work on what used to be a day of rest, under a sign saying they weren’t worth the extra cost.

However, there is another sign that still hangs in the pub which didn’t make it into the media reports. As a further example of the attitude of the owner of the Bombay Bicycle Club, the clientele are thanked on their way out of the pub with this enormous mounted and framed sign:

BombayBicycleClub

Take a moment to read all the things this owner resents having to pay. He’s got all the taxes he can think of up there (even the ones he’s not directly paying, like the Carbon Tax (sic)). He’s also got what would appear to me to be business expenses of his own choosing, including interest on an overdraft and website expenses.

But there’s something missing from the sign. There’s one major thing that the clientele of his business are paying for, which the owner has conveniently neglected to include in the list. No, I’m not talking about the cost to our community of the pokie machine addicts who no doubt helped fund the exorbitant renovations (the pokie lounge is open from 9:00am until midnight from Sunday to Wednesday and from 9:00am until 3:00am from Thursday to Saturday). I’m talking about the profit. The profit the owner of the Bombay Bicycle Club pockets at the end of a long day’s work by his staff who make a tiny fraction of what he does. Of course I’m not saying that the owner doesn’t deserve this profit. It is his business and he has taken the entrepreneurial job-creating risk of developing it. But what gap between the workers’ wage and the owner’s profit is our community comfortable with? Isn’t this the question at the heart of any negotiation between labour and capital?

I have a message for the owner of the Bombay Bicycle Club, which comes via Elizabeth Warren in this clip I have linked to many times on this blog. You’ve built a business, and it’s a good business, so well done. But you did not build it on your own. Your staff run your business and they do an excellent job. They make great food, they serve it efficiently and they keep your business running at a profit. If your staff weren’t educated, they couldn’t run your business for you. Their education and training was paid for by tax-dollars. The roads that your customers drive on to get to your pub were paid for by tax payers. The police who come and arrest drunk and disorderly clientele are paid for by tax payers. The firemen who would come if a fire started in your kitchen are paid for by tax payers. The hospital that you would go to if you had a heart attack is paid for by tax payers. The economy that you rely on to provide enough wealth for the community that they can afford to go to your pub is run and managed and regulated by tax payer funds.

I wonder if it’s ever occurred to the owner of the Bombay Bicycle Club that most of his clientele are workers.

When I spoke to one of the staff at this pub, they said the owner treats them well and it’s a good place to work. This is good to hear, and somewhat surprising considering the attitude displayed on the board. However, what’s most important about this example is that the business owner is making it very clear that without an award that legally entitles his workers to a minimum wage, and penalty rates for working outside of normal hours, his workers wouldn’t be receiving their current level of compensation for the work they do. These workers would have no hope of negotiating individual pay deals with this boss without the help of their union of workers.

What would happen to these workers if Tony Abbott gets his way and smashes collective bargaining? What happens if minimum pay rates are put at risk? Some bosses who value the contribution to their business that each of their workers make would still pay their staff fairly. But I expect many others, perhaps the owner of the Bombay Bicycle Club, wouldn’t. I expect that those who resent having to pay their staff to work abnormal hours are very likely to resent paying them at all.

[twitter-follow screen_name=’Vic_Rollison’ show_count=’yes’]

28 comments

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  1. ian saffin

    I wish the bloke who lives in a mansion down the road and drives a $200k BMW plated NOTAXES would read this! I understand why BMW in the townships of Sth Africa stands for break my windows!

  2. Graeme Rust

    if abbortt gets his way, we know what the owner of this pub will do to his workers, and if he does he will find a lot of people will stop going to his pub, and all the rest that follow the same path.

  3. Maureen Walton (@maureen_walton)

    What an extremly selfish person. Those taxes are nothing to do with anyone else, but the owner. Every body who works or owns a business has to pay taxes or should. It is as you say Victoria, if it was not for the workers the guy would not be able to run his business.

    So get out of the Business mate. Go work for some one, who you would expect top wages to you plus extras…..

  4. olddavey

    Victoria,
    You need to find another pub.

    Having said that, penalty rates ARE a real minefield and need to be looked at by all concerned, not just some jumped up bunch of liberal hacks who have already been told what to say.

    For many weekend work has no effect on their lives but for others it’s family time and they need to be compensated. A balance has to be struck for people in differing circumstances, otherwise industries like your pub will only have cheap (or unhappy) labour which will equate to cheap (or bad tempered) service and in the end loss of a lot of custom.

    But as you said, it seems as though the business owner spent a shitload of cash creating a flash eatery and now expects every one else to foot the bill, including the taxpayers that don’t even live in the state.

    So, as I said at the start, find another pub (and let them know why).

  5. RedCedar

    The far right won’t be happy until we’re back to bad old days of the Industrial Revolution…. the “dark satanic mills”. Slave-like wages and conditions…. then they’ll prolly start campaigning to re-introduce child labour! The campaign by the dark lords of the far right to destroy our wages and working conditions has to be resisted by workers with all their might.

  6. leighton8

    This reminds me of some of the American restaurant owners who started doing similar things and making similar “veiled” threats to their employees when the US government brought in the “Affordable Care Act” (aka, Obamacare) last year. They (and this Australian pub owner) all must be reading from some American Legislative Exchange Council (ALEC) hand book on this. It is very infuriating when people who are often getting rich in an society are at the same time trying to destroy the social structure (by gutting it of tax support) that the system is reliant upon.

    Short sighted greed and selfishness …..

  7. John Driggers

    Hey, it’s my local too! I went there for the first time when the original sign was up. I was, quite frankly, a bit put off and wondered how the owner thought that posting it would “help” his business. This other sign you have written about seems to indicate that the owner somehow feels that every penny that enters his cash register should flow to his pocket. I have decided that I’ll help him avoid paying at least some of those taxes and fees by reducing his income via just not going there again and encouraging those I know to patronise other fine establishments. Lower revenue will mean a lower amount of tax is paid.

  8. JohnB

    The same rationale of social interdependence of the “Pub” applies to multinational corporations who seek to trade and benefit in one nation, but evade paying domestic taxes and levies normally applicable in that nation by use of remote tax havens.

    Thus they legally manage to avoid contributing to their customer or host nation’s infrastructure and social welfare.

  9. olddavey

    Maureen,
    You are so right. I have worked for private employers and government and run my own business and I have always paid tax when appropriate. There are times when my business wasn’t doing too well and I had no chance of a handout, but nor was one asked for.
    From experience, most of those who ask for and get a handout don’t really need one.

  10. Chris Anderson

    Looks like he’s trying to justify his prices.

    Does look like a LOT of expenses in running such a business. Surely it could be simplified.

    But hands off penalty rates I say. or Up the hourly rates of those who work a roster that requires weekend work. There has to be a way to compensate those who are required to work weekends and Public Holidays.
    It’s only fair as they are sacrificing Family and Friend time, sometimes without a choice, if they want their Job.

  11. Kate

    And nowhere does he list those staff wages! What a bogan and hypocrite. If it’s soooo bad, sell the business and shut up.

  12. Dan Rowden

    How about the pubs and related outlets that want to slap you with a 15% surcharge on public holidays even though they don’t pay their staff penalty rates? Business people all too often just suck.

  13. olddavey

    JohnB,
    Exactly, and that’s why if we’re not f*ed now we will be soon with the kindergarten kids running the country.

  14. John McCulloch

    The owner who runs that fine hotel, like a lot of conservatives, actually live in a bubble & have a narcissistic outlook on life … the “I’m alright jack” attitude.

    I say that because if the owner had any CDF, he would realise that removing penalty rates would not just apply to his workers, but many, many workers in the community, me included.

    Without penalty rates my wage drops by 15% – 30%, depending on shifts, & do you know the first thing I would stop spending on … discretionary spending. Yep, that’s right, things like Foxtel & going to the Pub once a week for a feed, with a lazy $20 on the the Keno. No more, all gone, zip as I adjust my income to live my life without ‘entitlement’,

    Removing penalty rates would place the biggest impost on places such as the Bombay Bicycle Club since the introduction of RBT & would drive another nail into the increasingly crowded coffin of Australian small business.

  15. Hobo Sapiens

    What will happen is that the better staff will go to the better paying jobs and those who pay less will have to make do with the less-skilled or motivated staff, which will cost them business. The market works in all sorts of funny ways.

  16. Chris

    No need to worry about it, Rupert will try and get us to embrace tipping as part of the normal bill. I’m not against it as a bonus for good service and regularly tip accordingly! But when it becomes supplementing wages because the boss wants a bigger slice of the pie, well that’s just wrong!

    It simple means the 99% help each other out while the 1% roll in a bigger pile of money!

  17. Terry2

    Here in Far North Queensland we have been getting a lot of rain recently from the monsoon (I wish we could send some of it south).

    Last night a big tree came down across our road, the root system was probably water logged and had been weakened by recent winds associated with a cyclone. It was about 2 am and soon a council crew arrived on site with chainsaws at the ready. They cleared the tree off the road, taking about ninety minutes and thus removed a very real traffic hazard.

    I do not begrudge them their penalty – I call them bonus – rates, neither do I begrudge nurses or firemen or other workers who are prepared to sacrifice a good nights sleep for the public good.

    What does annoy me is this government and the Murdoch media using public holidays & restaurant staff in Noosa as an illustration to spin the evil of ‘penalty’ rates and to boost their argument to eliminate them.

  18. John Fraser

    <

    I'm looking forward to Joe "don't know" Hockey letting some of his "entitlements" go.

    No more cheap meals at Parliament House.

    Cut right back on Electorate expenses … you know , the $9 thousand plus that Abbott had to pay back.

    So much to be saved just in pollies "entitlements".

  19. Catriona Thoolen

    So much focus on penalty rates for hospitality workers…what about afternoon and night shift workers? In some ways I would like to see all these penalty rates removed so those who are fighting for that would see the real outcome.

    Why would you work a night shift in a hospital or nursing home with no penalty rates? What about our Police? Our Firefighters? Our Social Workers? These people would just decide to NOT work those shifts or days…then the owners can cover those shifts/days themselves.

    I imagine no one willing to work public holidays or sundays in cafes and restaurants (when the takings are highest) once again the owners would have to work these shifts/day or just not bother to open.

    Then when anarchy* rules, the owners of these businesses would be coming up with all sorts of plans to encourage employees to work these hours. Things like ‘cash in hand’ bonuses? Or some sort of a ‘benefit’ (opposite of penalty) rate?

    I know Australians will NOT allow things to get that far. We will not allow the government to harass the lowest paid workers because we really do believe in a ‘fair go’ for all.

    But the idea amuses me, employers running around coercing, begging people to work for them, ‘please just the one sunday, I can’t be profitable without being open on Sundays. Please help me’ Then we will have equality when employers have to finally admit that without their employees, they do not have a business.

    *”There are also other forms of anarchy that attempt to avoid the use of coercion, violence, force and authority, while still producing a productive and desirable society.” http://en.wikipedia.org/wiki/Anarchy

  20. Billy moir

    The consistent tragedy is that none of my abbuttian friends will every read this. They are content with their that penalty rates are union rorts and should be abolished. Consequently, they will not discuss the topic or read anything that challenges such beliefs. This leads to the lie that ‘Have read..’. At best he has seen the volume, realised negative reaction and made the hasty retreat to ‘belief’ with no attempt to support his beliefs. When the rabbott destroys penalty rates, this employer will have work policy of take it or leave it and advise low paid workers(a la macdonald’s) to contact centrelink for a wage top up. Little billy has no choice but to show the rabbott’s amorality and get the media excited about his inability to separate or explain his truths and lies or his beliefs and reality.

  21. Billy moir

    Catriona, choice to work is not available to most workers. If a workplace uses a resource that is cheaper from 2000hrs till 0600hrs weekdays and 2200 till 1000 on weekends? Take it or leave it. Cash in hand is the only way American service industry works and we are not a country of tippers. As for Aussies and a fair go? Who thinks Gillard got a fair go in the media? Why does the rabbott hide results from the media?? Sadly fair go is often lip service that disappears with exposure.

  22. Catriona Thoolen

    But the choice to work is only part of the life choices. The costs of going to work have to come into it, the cost of transport and child care. If the pay after costs is too low, people will choose not to work (at the unsociable times) or move to someplace cheaper to live.

    Every mother calculates these costs…and that doesn’t even take into account the preference to be with their children. No one is going to work to effectively make no money.

    My point was actually that those wanting to get rid of penalty rates should be very careful of what they wish for, because it could come back and bite them on the bum.

    Off topic, but the only people who though JG got a fair go were the ones getting the media exposure. I never understood the disrespect of the office of PM and the “misogynist” speech made my day, my year. I don’t think there would be many women in the world who could not relate to it, even if many men still don’t even realize they are doing it.

    I may be naive, but I do still believe that the majority of Australians will only be pushed so far before we revolt! (3 years, 7 months and counting unless TA is forced into a DD)

  23. diannaart

    Excellent Victoria.

    Yes, there is a shitload of costs running a business – apart from the service or product provided, the most important part of most businesses are the employees – without these human beings an employer has nothing. Yet it is the cost of wages that appears to upset so many (not all) employers the most.

    On that expensively framed and presented list of running costs, I have no doubt that governments do ‘double-dip’ – this is an issue for employers to take to our politicians.

    Probably too obvious to do that – just put all the blame on the workers, that’s the capitalist way… bloody workers… if there was a way of running a business without people… well, there are a few – the stock exchange avoids a huge workforce, but then the finance sector doesn’t exactly create anything… apart from the spurious act of “value adding”.

    The final insult being, as Victoria noted – what does the boss get paid? Perhaps the owner of your local, Victoria, should consider becoming a stockbroker – no unnecessary humans needed for that – just an excellent piece of software – OK which was written by a human – but soon we’ll have programs for that as well.

    No more people may apply.

  24. grumpymoran

    This pub has not been the same since it ceased being the Ovingham hotel used to visit on the way to Rowley park for a few bears before the speedway used to be a good local pub now the name says it app

  25. Jan Dobson

    I’ve been a business owner and employed as an accountant and a business manager and know, from first hand experience, that many business owners earn less, on an hourly basis, than their employees. I also know that many business owners appreciate and compensate their employees above the standard.

    Perhaps it could be suggested to the owner of this business, clearly not one of the above, that he take or refresh his finance management skills. Multiplying the cost of a meal by the penalty rate is an error in computation, inflammatory or not, and it’s pleasing that the sign was removed because of customer displeasure.

    Similarly the most cursory glance shows an error on the ‘thank you’ sign. His business does not pay GST. He remits to the ATO any GST paid by his clients LESS the GST on his input costs. ie Mr or Ms Citizen pays GST, businesses don’t.

    And for the pendant, yes if you buy a luxury vehicle for your business you will pay proportional GST and GST is claimable on some entertainment, for example, but the basis of my argument is still valid.

  26. SmeeHere

    Did anyone else notice Fringe benefit tax? I wouldn’t mind betting that none of his employees are driving around in a company car necessitating his payment of FBT

  27. samantha

    What is it with cyclists and arrogance?

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