Do penalty rates worry owners of Gold Coast commercial property?

By Greg Bell

Not every business can operate in a regular nine to five pattern. Many retailers and hospitality businesses have to open at different times to capture the right audience and maximise their revenue, which brings into play penalty rates for employees. 

As the Fair Work Ombudsman notes, these can apply when your staff work on weekends, public holidays, late nights, early mornings or general overtime. Given the thriving nightlife that characterises our region, there are likely to be a lot of owners of commercial real estate on the Gold Coast that will pay penalty rates for their staff. 

Awards like this are an essential part of the employment landscape. But will they stay? There have been calls from different corners for changes to this system of late, which are worth looking at if you're engaged in retail leasing on the Gold Coast. 

Concerns rising among the hospitality industry

The Fair Work Commission undertakes a review of these awards systems every four years, which is open for submissions from players in the industry. According to a Chamber of Commerce and Industry (CCIQ) release from 29 June, many bodies in the Sunshine State have banded together to call for more flexibility when it comes to penalty rates in the hospitality sector.

The bodies that have teamed up to call for this include the Queensland Hotels Association, Motor Trades Association, Queensland Tourism Industry Council and the Franchise Council of Australia, among others, showing how many industry voices are in unison on the issue. 

"A staggering 81 per cent of businesses in the hospitality sector indicated that penalty rates and public holiday entitlements are a major to critical cause for concern," said Nick Behrens, director of advocacy and workplace relations at the CCIQ. 

He added that 60 per cent of businesses that they surveyed thought that penalty rates had greatly increased due to the Fair Work Act and Modern Awards. If you've bought commercial property on the Gold Coast for a business, you may be among these. 

What are the impacts?

According to Mr Behrens, penalty rates in their current form are preventing businesses from correctly setting up their staffing to meet the demand of peak hospitality hours. This means they are reducing employment hours, as it is not financially viable to stay open and continue paying the current levels of penalty rates. This harms businesses and also means those seeking work are finding less hours available, Mr Behrens noted. 

"Ideally, CCIQ would like to see negotiated agreements between employer and employee that allow for greater flexibility in the application of penalty rates, allowing Queensland businesses to generate alternative approaches that involve specific arrangements for each business and tailored to the scope of work under each award," he added. 

This sort of reform could see many more businesses open, including some significant Gold Coast retail leasing opportunities. According to a survey from Tourism Accommodation Australia in 2014, 67 per cent of hoteliers closed outlets or reduced services because of penalty rates. 

"Retailers, restaurant and hotel owners, and service providers have consistently indicated that they would be more prepared to trade and hire extra staff if the penalties for opening on weekends and on public holidays weren't so excessive," noted Carol Giuseppi, acting CEO of the TAA. 

Clearly, there are heavy impacts on those who own commercial property for sale on the Gold Coast and hospitality businesses within this. If changes occur, it may allow the industry to thrive even further. The Gold Coast is already a hot destination for those seeking a slice of the decadent, leisurely lifestyle, and more hospitality businesses would complement this nicely.

To find out more about commercial opportunities here, make sure to contact Ray White Surfers Paradise. 

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