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Employers anxious about award system -

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Reporter: Sue Lannin

ELEANOR HALL: The Federal Government is still battling to get its industrial relations changes
through the Parliament but a new award system will come into place at the start of next year,
regardless.

Agreements governing minimum pay and conditions across the country are being simplified by the
Industrial Relations Commission.

But employers in industries like hospitality and retail says the changes could cripple them in an
already depressed economy.

Finance reporter, Sue Lannin.

SUE LANNIN: As the economy slows down, life is getting tougher for restaurants and others in the
food industry.

Mandy Foley-Quin runs catering company Stedmans Hospitality and says the overhaul of awards will
make a difficult time even worse.

MANDY FOLEY-QUIN: What happened was we had many different pay awards, pay structures. Restaurants
and caterers had one award, hotels had an award, and what they've decided to do is actually have
all the hospitality workers under one award.

It doesn't work for us because there's so many areas of the sector and they need to be looked at
differently. Unfortunately it's not being done like that and it's going to cost work.

SUE LANNIN: The hundreds of awards across industries and states are being standardised by the
Industrial Relations Commission.

Louise Tarrant is the head of the Liquor, Hospitality and Miscellaneous Workers Union.

She says the new awards will a modest pay rise for some, but a wage fall for others.

LOUISE TARRANT: For very young workers, and there's a lot of young workers in the sector, the
hourly rates will decrease up to 10 per cent and we're not happy with that at all, obviously.

The other end of the spectrum there will be some increases but they're pretty modest and they're
quite minor. There's a lot of hype in the sector coming from the Employers Association at the
moment about massive increases, but in fact what there is, is a reintroduction of a basic safety
net.

SUE LANNIN: The changes mean that the loading for casual workers across most industries will
increase from around 20 per cent to 25 per cent.

That's the extra money they get on top of their hourly wage to compensate for the absence of
benefits like sick leave and annual leave.

John Hart from employers group Restaurant and Catering Australia says the industry can't afford it.

JOHN HART: We're looking at very substantial increases across the board in the order of
$200-million for the industry. In terms of hourly increases they're more applied in areas where
penalty rates are increased and in those instances we're looking at somewhere in the order of a 20
per cent increase to wages paid for an employee in a particular given day.

So those sort of increases make a huge difference to what is already a pitifully small bottom line
for restaurateurs.

SUE LANNIN: Because the union says that for young workers, say for waiters or kitchen hands, their
hourly rate will actually go down by 10 per cent,

JOHN HART: Well, I'd like them to show me where that is because I certainly can't see it in the
drafts that I've got. It may be the case in certain other sectors of the industry, like perhaps the
hotel sector or the motel sector or the club sector, but it is not the case in restaurants.

SUE LANNIN: Louise Tarrant says the union has agreed to spread pay rises over five years to lessen
the impact.

LOUISE TARRANT: One of the issues that, in particular, has created a lot of noise from the
Employers Association has been in relation to the increase of casual loadings in South Australia
from 20 to 25 per cent.

If you phase that in over a five-year period we're talking about a 15 cent an hour increase. These
are not massive changes; this will not dislocate or bankrupt an industry.

SUE LANNIN: But can you see employers' side when they say it's a very bad economic environment and
some people may not even have a job?

LOUISE TARRANT: I think what we've got to remember is this modern award for restaurants is not
extravagant. What it's trying to do is reinstitute what voters voted for in November of 2007; and
that is against the excesses of the WorkChoices and in favour of a very modest, very basic safety
net for all workers.

SUE LANNIN: John Hart says any wage rise will hurt.

JOHN HART: A 20 per cent increase is a 20 per cent increase, whether it's an increase over a month,
a year or a day and all this dragging it out over a five-year period does is extend the period of
pain. It's pain nonetheless.

SUE LANNIN: The Industrial Relations Commission will make the final decision when it hears the case
in June. It's finalised about 14 awards so far.

There's around another 30 to go and the war of words and wages is set to continue.

ELEANOR HALL: That's finance reporter Sue Lannin.