There's a Small to Medium Enterprise (SME) I know, a non metro based engineering firm that engineers & manufactures all sorts of industrial products & does general heavy repairs. A family owned & run operation employing half a dozen staff.
Times have been tight, the business has buckled under and has soaked up some of the slowly decreasing margins. COVID19 hits and now, they need to stay in the black, maintain some profit buffer to maintain their loan repayments, pay their suppliers, the higher freight charges they get hit with and look after their staff.
They're on the brink of delivering the facts of life to the staff and how they'll all have to buckle under, raise productivity to keep floating in case things get much worse, that there may be some cuts to pay rates to keep the doors open. The mum n dad owners have been putting off this "talk" but had set a date to do it when a week before one of their young staff members hits them up for a pay rise. His award for his position, at his age, at his level of training & experience is just under $24/hour. He's house sharing with 3 young mates. They could be putting money away or should have for the last few years but they've been living high on the hog.
He already gets paid above the award, he gets paid $30/hour. He hits up his employer and says his house mates (who do the same job at a rival business) get $36/hour and that he should too...just as things tighten.
His employers explain there's no way they can afford that but they'll buy him a tank of fuel per week for his car to help make ends meet. He accepts that but still wants an extra $6/hour or rather $13/hour above his award of $24/hour.
Now in 7/11 stores, fuel stations and restaurants across Australia we hear of underpaid staff. They were paid less than they were entitled, they are owed that money and usually court proceedings follow to ensure, quite rightly, that the staff get what they were entitled to. However here we have a case where staff are over paid & want more because the rival employer pays more.
Here's what happened. The owners of the 2 businesses got together and had a chat. Turns out the other business is NOT paying $36/hour. He pays exactly the same amount. He also spent an entire day with his accountant just trying to tackle & interpret the Award. Its was a mine field.
There's some discussion now about one clause, which I'm yet to track down, one clause in the act covering payments above the award. It may be that staff may be entitled to the award but perhaps now it seems the employer has the right to expect that the above award segment is credited to the employer, that either there's a rise in productivity or a stretch in hours work to the value of the over payment.
In any case, both businesses actually knock the staff off work 15 minutes BEFORE time each day. So they're working 1.25 hours less per week than their supposed to, they're getting paid $7/hour extra for every hour they work (and the 1.25 hours a week they don't) and now one is getting a free tank of fuel.
So now we have a business with reducing margins, trying to rationalise the costs they can and the young staff member wants more he feels he is entitled to, despite the effect on the business and they size of his current over payment.
How this will pan out I don't know, the business will either continue on tighter margins and survive until a post COVID19 economic recovery, or go broke and close. Or the staff take a pay cut, work their full hours and share in the pain with the business owners to keep open, to keep working, to keep in a place where they can survive and reposition as things improve.
I am actually not going to be surprised if the young staff member comes out with "Yeah but I need the extra money, I'm buying a jet ski"
I think its time for the Government to rationalise or at least simplify the Awards, reduce the number of awards and reduce the need for lawyers to be required at every turn. In the meantime one daft young staff member has ear marked himself as perhaps needing to be the first staff member let go when times get even tougher. Ironically this is a business where the owners have been other people's staff members so they said they would never pay below the award. Yet with this slap in the face during their greatest financial threat I think they can be forgiven for paying exactly the Award Rate & not one cent more and expecting staff to work their entire required hours each week.
