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Don't pass on wage increase

Thursday, 18th February, 2010

* John Groenendijk. * John Groenendijk.

By Darrin Manuel Business Broken Hill is encouraging local employers not to pay an allowance increase that was recently passed by Fair Work Australia.

The pay increase comes as an indirect result of Broken Hill workers in the retail, fast food, pharmacy and hair and beauty sectors switching to the federal government's new "Modern Awards".

Under the new awards, employees are to receive four weeks of holiday rather than the five weeks allocated under former awards.

This change prompted the Shop Distributive and Allied Employees' Association (SDA) to apply to Fair Work Australia to have the extra week of holiday returned to local workers. Fair work Australia refused the application, but instead agreed to increase the "Broken Hill allowance" in wages by 4.28 per cent. Business BH Chairman John Groenendijk yesterday slammed the wage increase, saying it will have catastrophic repercussions for the local economy.

"Whilst the rest of the Australian economy moves into a period of economic growth, the Broken Hill economy will see an increase... in the price of goods and services. "This was known in the 70's and 80's as stagflation and hasn't been an occurrence since then. The bottom line is this deal has put Broken Hill back 30 to 40 years."

Mr Groenendijk said the increase would also lead to greater unemployment in the city, and questioned the SDA's motives in requesting the rise. "The allowance in question equates to about $28 per week per employee and we already have businesses around town saying they cannot afford to pay it. "This allowance will put people out of work - one business has already said they will downsize their business so they no longer need to employ staff. Others will do the same. "Further we have businesses around town saying they will have to increase prices and potentially become uncompetitive. Broken Hill loses enough business to Mildura and Adelaide but it looks as though the Adelaide-based SDA would prefer to see customers go elsewhere rather than shop locally in Broken Hill. What are they really trying to do here?"

Business BH said that no adequate reason had been given for the wage jump, and letters to the Minister for Employment and Workplace Relations Julia Gillard requesting an explanation had gone unanswered. The group is now seeking negotiations with Fair Work Australia, and have urged local employers to hold off on paying the Broken Hill allowance increase until the matter is resolved."Business Broken Hill is saying to all businesses 'do not pay this allowance until the matter has been adequately dealt with via negotiations between Fair Work Australia and Business Broken Hill.'

"We must do what is right for Broken Hill and our future, and give Broken Hill the opportunity to grow and prosper without the interference from people who don't even live here, do not know our circumstances, and obviously have an agenda that they are not prepared to share, but will significantly undermine our economy." SDA Secretary Peter Malinauskas dismissed Business Broken Hill's stance as disingenuous "scare-mongering", and said the allowance increase simply compensated workers for entitlements lost when the Modern Awards took effect.

He said the wage increase covered the loss of a fifth week of holiday, and a previous allowance of $12 per week. "They assert that this allowance will hold back the economy in Broken Hill, but nothing could be further from the truth," Mr Malinauskas said. "It essentially results in financially maintaining the status quo for workers and employees, and it was the right decision to make. "We make no apologies for doing the best we can on our members' behalf to maintain wages and conditions that already existed."

Mr Malinauskas said Business Broken Hill's criticism of the SDA was merely an attempt to deflect attention from their own shortcomings, after the local body failed to make a submission to Fair Work Australia when the issue was up for consideration. He said the group had also failed to specify that the 4.28 per cent allowance would be gradually phased in over a five year period beginning on July 1, and would not be an instant increase in employee pay packets. As for the suggestion that local businesses should withhold the Broken Hill allowance, Mr Malinauskas said employers would be acting illegally should they choose to do so."Those people employed under the Modern Award do have to be paid that allowance from the first of July," he said. "I would strongly advise local business to comply with the law, and I think it's very irresponsible of Business Broken Hill to advocate their members breaking the law."

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