Describe about the Impact of Reducing Overtime Penalty Rates.
In contemporary corporate business, industry ethics concern the moral judgement of an individual to decide what is right and wrong. Through the identification corporate responsibilities, business ethics and code of conduct within the organisation have established the highest level of trust within the affiliates and business entities (Moon, 2011). Business ethics have delivered moral principles to a corporate business structure to determine the actions and activities within the organisational structure. For instance, business ethics prohibit modern organisation to condemn the practices such as child labour and bribery. Moreover, business ethics make the organisational management more responsible so that the administration can treat each of the subordinates in a fair way (Goodpaster, 2011).
Understandably, business ethics enforce corporate sustainability creating fair competitive practices. Also, business ethics contribute towards corporate social responsibility practices so that organisations can deliver an aggressive return to the society. In order to govern the ethical and legal standards for employees and employers in Australia, the Fair Work Commission has been identified as Australia’s nationwide Bureau of relations tribunal. The commission regulates fair policies and competitor regulations promoting rights of the stakeholders. In order to resolve the issues in ethics, Fair Work Amendment Act 2013 and the Australian Human Rights Commission Act 1986 (Cth) can be enforced to reduce the grievances of the plaintiff (Fair Work Ombudsman, 2016).
Issues regarding reducing overtime penalty rates
Introduce and explain the issue
Employees working in Australian corporate firms are often given overtime penalty rates for working on weekends, public holidays, late night shifts, overtime and early morning shifts. In the contemporary business situation, a deduction of overtime penalty rates in different industries can create so many issues within the organisational management. High amount overtime penalty rates and night shift loadings have influenced the workforce to work in a dedicated way (ABC News, 2015). In the case of reducing the overtime penalty rates, the adjusted pay rates might not meet the requirement of the employees (Harrison, 2015). Moreover, considering the business ethics, human resources must be paid sufficiently for their excess work during weekends, public holidays or overtime.
Predictably, the recommendation of reducing the overtime penalty rates has been strongly objected by the unions (ABC News, 2015). Due to such decline in overtime penalty rates can create an adverse impact on the wage structure as well. Moreover, the employers’ association has welcomed the recommendations (Jones, 2011). Invariably, the deduction of penalty rates will be eventually profitable for the employers. Under the current scenario, productivity of the firms can get affected on a serious note. Notably, the Fair Work Commission must consider the change in overtime penalty rates as one of the most sensitive issues.
Example of the issue
The primary example of the issue is the conflict among the employee unions in different part of the country. The controversy related to the recommendations made by critics is the major example of the issues that may create fall of production in the weekends (Moon, 2011). Currently, a strike occurred in the Gold Coast Port of Brisbane which is an important trade centre for the country (ABC News, 2015). The strike occurred due to conflict between the trade unions and employers in the region regarding the minimum wage rate increase and overtime penalties. Hence, it can be seen that the reduction in the overtime penalty rates will result in loss of productivity and loyalty of the employees towards the company.
Impact on workplace
The main impact of the reducing overtime penalties will hit the workplace with poor productivity and motivation towards the work on weekends. The employees will not feel motivated to work overtime on Sundays (Lippke, 2011). Hence, it will impact productivity of the organisations and performance of the workforce. Furthermore, the reduction in the overtime penalties will make the employers benefited due to reduction in the payroll expenses for the weekends (Jones, 2011). The reduction will result in a conflict between the employee unions and employers. It will result in strikes and social conflict in the economy. Hence, it is recommended to the government of Australia not to reduce the overtime penalty rates.
It can be seen from the above analysis that the government policy to reduce the overtime penalty rates will benefit the employers and will result in workplace conflicts in the organisations. It will reduce the motivation level of the employees and impact the productivity of the organisation. Furthermore, the policy will result in conflict among the employees who are not willing to work on holidays and employers paying less for the overtimes. Hence, it is recommended to provide the employees with other benefits such as rewards on hundred percent attendance and gift coupons to work on holidays to eliminate the negative impacts of the policy. Furthermore, the companies can use other means such as employing part time workers at low rates for working on holidays. Hence, the alternative means can be used by the organisations to mitigate the issues of reducing overtime penalty rates.
ABC News. (2015). Productivity Commission backs abolishing Sunday penalty rates. [online] Available at: https://www.abc.net.au/news/2015-12-21/productivity-commission-recommends-changes-to-penalty-rates/7045624 [Accessed Sep. 2016].
ABC News. (2015). Reducing penalty rates makes economic but not political sense (at least for now). [online] Available at: https://www.abc.net.au/news/2015-10-01/smith-reducing-penalty-rates/6818876 [Accessed Sep. 2016].
Fair Work Ombudsman. (2016). Welcome to the Fair Work Ombudsman website. [online] Available at: https://www.fairwork.gov.au/pay/penalty-rates-and-allowances [Accessed Sep. 2016].
Goodpaster, K. (2011). Business Ethics and Stakeholder Analysis. Business Ethics Quarterly, 1(1), p.53.
Harrison, S. (2015). Varying rates for unsocial hours ‘undermines deal’. Nursing Standard, 19(17), pp.5-5.
Jones, S. (2011). Penalty Rates under Challenge. Journal of Industrial Relations, 23(4), pp.504-507.
Lippke, R. (2011). A Critique of Business Ethics. Business Ethics Quarterly, 1(4), p.367.
Moon, C. (2011). Business ethics. London: Economist.