It’s all so very predictable. In his usual sloppy and insipid way, Tony Abbott is trying to bring on an industrial relations war with unions by blaming SPC Ardmona’s request for government assistance on over-generous wage and employee entitlements in the company’s Shepparton factory. Even when SPC Ardmona corrected the record by releasing their workers’ enterprise agreement, and even when local member and self-appointed SPC guardian, Liberal MP Sharman Stone called Abbott out for lying about the issue, Abbott still trudges forward seemingly unwounded. On behalf of his mates at the top end of town, Abbott is working towards their end goal, where business owners can treat their workers however they want, and can pay them however little they want. It’s all the workers’ fault if they complain, because apparently they should feel gratitude for having a job at all. And this despite that fact that that workers’ share of national income has been falling since 2000.
Despite the growth in their share of the national income, business owners and shareholders still want more. Always more. One way to get this is to reduce wages by any means possible. This is why business owners obviously want one objective of any wage negotiation between unions and business to be the removal of penalty rates for working unsociable hours. As chief friend of business and foe of workers, Tony Abbott has embraced this mission; his government has asked for a major review of workplace awards to assess whether minimum terms and conditions, including penalty rates, are still relevant.
I’ve recently come across a local example where a business owner’s displeasure at having to pay penalty rates generated bad publicity at what happens to be my local pub – the Bombay Bicycle Club. I’ve spent quite a bit of time there at a mid-week pub quiz or for a weekend beer and curry. Recently, the pub has undergone a major renovation, with the addition of a large car park and upgrades to the drive-through bottle shop, main bar and restaurant area, a new beer garden complete with fake palm trees, and a meticulous refresh of the incredibly flamboyant British Raj Indian theme. I don’t know how much the building works and interior decorating must have cost, but suffice to say they would have spent more money in the female bathrooms than I am currently spending renovating my whole house.
This article on news.com tells how the pub owner erected an expensive mounted wooden menu in the public bar. This showed how much the meals would cost if he multiplied them by the 2.75 award rate of loading his staff receive for working on a Sunday. It doesn’t take an economist to work out the flaw in this argument, because of course labour costs are just one of many cost inputs that make up the supply of a pub meal. After a backlash on social media, the sign was taken down. The owner was quoted as saying:
“Again, WOW. The sign has been removed. Have read all your comments. I will keep my opinions to myself in the future.”
Apparently the business owner was surprised that his clientele weren’t impressed with his attitude. It’s not clear how his staff, the ones earning penalty rates for working on a Sunday, felt about having to work on what used to be a day of rest, under a sign saying they weren’t worth the extra cost.
However, there is another sign that still hangs in the pub which didn’t make it into the media reports. As a further example of the attitude of the owner of the Bombay Bicycle Club, the clientele are thanked on their way out of the pub with this enormous mounted and framed sign:
Take a moment to read all the things this owner resents having to pay. He’s got all the taxes he can think of up there (even the ones he’s not directly paying, like the Carbon Tax (sic)). He’s also got what would appear to me to be business expenses of his own choosing, including interest on an overdraft and website expenses.
But there’s something missing from the sign. There’s one major thing that the clientele of his business are paying for, which the owner has conveniently neglected to include in the list. No, I’m not talking about the cost to our community of the pokie machine addicts who no doubt helped fund the exorbitant renovations (the pokie lounge is open from 9:00am until midnight from Sunday to Wednesday and from 9:00am until 3:00am from Thursday to Saturday). I’m talking about the profit. The profit the owner of the Bombay Bicycle Club pockets at the end of a long day’s work by his staff who make a tiny fraction of what he does. Of course I’m not saying that the owner doesn’t deserve this profit. It is his business and he has taken the entrepreneurial job-creating risk of developing it. But what gap between the workers’ wage and the owner’s profit is our community comfortable with? Isn’t this the question at the heart of any negotiation between labour and capital?
I have a message for the owner of the Bombay Bicycle Club, which comes via Elizabeth Warren in this clip I have linked to many times on this blog. You’ve built a business, and it’s a good business, so well done. But you did not build it on your own. Your staff run your business and they do an excellent job. They make great food, they serve it efficiently and they keep your business running at a profit. If your staff weren’t educated, they couldn’t run your business for you. Their education and training was paid for by tax-dollars. The roads that your customers drive on to get to your pub were paid for by tax payers. The police who come and arrest drunk and disorderly clientele are paid for by tax payers. The firemen who would come if a fire started in your kitchen are paid for by tax payers. The hospital that you would go to if you had a heart attack is paid for by tax payers. The economy that you rely on to provide enough wealth for the community that they can afford to go to your pub is run and managed and regulated by tax payer funds.
I wonder if it’s ever occurred to the owner of the Bombay Bicycle Club that most of his clientele are workers.
When I spoke to one of the staff at this pub, they said the owner treats them well and it’s a good place to work. This is good to hear, and somewhat surprising considering the attitude displayed on the board. However, what’s most important about this example is that the business owner is making it very clear that without an award that legally entitles his workers to a minimum wage, including penalty rates for working outside of normal hours, his workers wouldn’t be receiving their current level of compensation for the work they do. These workers would have no hope of negotiating individual pay deals with this boss without the help of their union of workers.
What would happen to these workers if Tony Abbott gets his way and smashes collective bargaining? What happens if minimum pay rates are put at risk? Some bosses who value the contribution to their business that each of their workers make would still pay their staff fairly. But I expect many others, like the owner of the Bombay Bicycle Club, wouldn’t. I expect that those who resent having to pay their staff to work abnormal hours are very likely to resent paying them at all.
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Media Inequality 
Interesting article Vic. Good to see you are firing on all cylinders. I guess by your account of what your investigating journalism has uncovered, is that the owner of the Bombay Bicycle Club would be more happy running any Bombay Sweat Shop staffed by underage peasant children in Bombay.
For me. I wouldn’t spend a farthing in his pub.
I’m not a fan of unions. Never have been. Never been a member of one. That said, they do have a role in protecting the vulnerable from bosses who are bastards.
Probably the main gripe that employers have with unions is when there is a sense of antagonism towards bosses irrespective of how decently they treat the workers. That feather-bedding occurs (NOT saying that this has happened at SPC or your local pub) but is nigh impossible to roll back when the business is running tight shows a lack of flexibility. Something like the utopia that Howes promoted would be great. Where goodwill existed on all fronts. Probably as realistic as hoping for peace in the middle east, though.
Immediately assuming that because as part of a larger review, the inclusion of considering penalty rates will mean they’ll be stripped away shows a belief that the coalition are politically suicidal. Anything that even smells like workchoices will be run a million miles from.
Ah you should have worked with the Painter and Dockers at South wharf in the dry docks on a hot day fella then you would know what it is to work in a union of old men who were First and Second War veterans. Yes they were tough old diggers and yes they belonged to one of the roughest and toughest union there was in Victoria in the late 1950’s early 1960’s.
Andy, I believe workers at Holden actually agreed to certain wage reductions to try and keep the company going here in Oz. And there other similar stories, but I am not sure enough of the details to list them here.
If it was a choice of no job, or a job with reduced conditions, I’d personally chose reduced conditions.
I personally know of a different company (not a widely known one) that used to make widgets at a factory they owned. It was just a part of their overall operation. Unionised factory. During negotiations demands were made that would make the factory uneconomic to operate. It would be cheaper to buy those widgets from an external party (effectively paying another australian company to make it in australia and cover the profit of that company) than to run the factory themselves.
This was outlined to the union reps: that their demands were excessive and that if they carried on insisting on them the factory would be closed. The union didn’t step back. The factory was closed. The company carried on, buying widgets from another company, but without the grief of dealing with an antagonistic workforce and their union.
Hi Jan,
You are dead right. And lets get this conversation on a factual level.
Here is the Holden submission to the productivity commission.
http://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCgQFjAA&url=http%3A%2F%2Fwww.pc.gov.au%2F__data%2Fassets%2Fpdf_file%2F0008%2F130211%2Fsub058-automotive.pdf&ei=1wX4Ur-VF4q4iQeNloEo&usg=AFQjCNGIRHq9-bgb2sO6pXJnSVpqQHS1Vg&bvm=bv.60983673,d.aGc
The concessions the Union made are detailed in the last pages of the document at appendix C on page 40 of 42.
What this shows is a realisation that they need their jobs.
Where there is a genuine need for variations of jobs the Unions do come to the party. They are not the Unions depicted in the “Widget story of Andy M”. I don’t even know what a widget is and I am bloody sure that who ever makes them doesn’t have a Union shop.
lets keep the discussion real. If there has been that behaviour then explain it don’t make it into a story.
You might also like to read my blog on the Holden debacle, it details the processes of the government which were not followed and the absolute Economic illiteracy of Joe Hockey et Al.
http://vinceogrady.wordpress.com/2014/01/10/holdens-decision-to-exit-australia-and-the-processes-surrounding-it/
Thanks for all that information Vince and the links to the truth.
Thanks Old Man of the Sea. Its always rewarding to go and find the truth out for yourself and not believe anything the papers say.
The reason I think Hockey is an Economic illiterate is because Holden put in $3 we put in $1 and that generated $18 of economic activity.. he shut the place down because of ideology, not because of economics.
That’s Ok Vince. I worked at Fords in the early 1970’s when they had a workforce at the Geelong plant of 5,000 plus and now 40 years later Ford Geelong plant had about 240 production workers and even less now. Fantastic intelligent smart manufacturing improvements has downsized the number of workers needed to produce those similar number of parts that go to make up a car, which is now done by computerized robots. These robots cost a lot of money to build and repair. Now that is where the cost is hidden. So where have all the old workers gone, gone to their graves everyone.
I used to work at Ericsson’s where we made telephone exchanges at Broadmeadows. The best Sales pitch was taking prospective customers around the factory and showing them the component insertion machines and the wave solder and all the Quality controls that went into the process.
Never let it be said that Australia can’t do advanced manufacturing. Because we did and still could if we didn’t have such a short sighted government in charge. none of them have ever worked a day in their life in such a place and they just know theory and are not very good at that either.
Much of the innovation in manufacturing comes from the workforce and the people who actually like what they are doing. Those are the people who really matter and they are not like they are painted by these Idealogues.
One of the MANY things I don’t understand about who supports whom is that when SPC Ardmona refuted carefully and precisely what the leader of the rabble of wicked children claimed about workers’ conditions, the press simply looked the other way.
Don’t they know how much we loathe him and his cohorts?
Don’t they think we want to be told not just what the little monsters say and do, but also of the victims’ responses?
My opinion re SPC isn’t driven by the working conditions at the place, but that if it was such a viable investment, why CCA is playing poor and begging for assistance. Eitehr the investment is viable or it isn’t. Seemingly every industry that goes cap in hand to govt for support is on its last legs and we are only delaying the inevitable.
Thanks Victoria,
You, as ever have done a great job pointing out the things that this business owner leaves out. The sign is interesting, it shows a mind set that he thinks he is badly done by. If he doesn’t wan to pay accountancy fees then give someone a job doing his books for a lot less than an accountant charges. The program (once set up properly) actually does all of the work.
Also that list of fees and charges is a grab bag of everything he can think of. And you are so right.
All of them are charged in the prices (and they are pretty expensive meals for Curry) and those prices include his profit.
All he is doing is pointing out that those are the things that are required of all of us to live in a democratic society.
I wonder how much the sign cost?
The way I deal with these type of people is to never give them my custom.
Hey Victoria,
I’m a Law and Commerce student that has worked in hospitality for years and my parents are caffe owners so I have the fortunate position of experiencing both sides.
I’m going to hazard a guess that you are not a business owner. I understand your frustration at the frugality of business owners but my questions to you are why do you assume that all the workers are efficient, excellent and educated? What makes them worth more (approx 2.75 times more) on a Sunday than a Monday? For a lot of hospitality businesses Sunday is a quiet day, why pay employees an exorbitant amount of money when you are doing less trade?
This is a capitalist country, not socialist, it’s called a job “market”, so employees must compete for jobs, not expect them to be handed out. Want to be paid more? Get training and become more valuable! Pay would be more accurate on a performance/trade basis.
As an employee for a cafe not owned by my parents I would not, do not, expect to be paid $50 an hour for my 8 hour Sunday shift. $400 in one day?! If you are a valuable or tenacious employee you are able to negotiate a better pay. Otherwise, think of an alternative industry.
Andrew, penalty rates have been a part of business costs for many, many decades. Certainly long before you were born. Anyone buying a cafe, hotel, bar or restaurant would have had to take such operating costs into consideration when setting prices. If owners of such businesses whinge about penalty rates that is their problem. Most wages in such establishments start from a fairly low base rate to accommodate for these penalties. Nursing is a prime example. If Sunday is such a quiet day why bother even opening?
Casuals surely would be paid a flat rate which is loaded slightly to account for their lack of holiday & sick leave, superannuation plus no penalties.
alternatively, have a different menu for sundays / holidays with prices modified as required to cover the penalty rates and quietness of the day.
Hey Andrew,
Nice that you have some idea of the both sides of the fence. I hope that you are studying accounting in your degree. You see grasshopper everyone has costs and employees have those costs too. I have never seen Victoria say that the workers are all efficient,excellent and educated. I suspect all she is trying to do is to actually say that we are all in a struggle to survive in this society today.
As a commerce student you may be familiar with the 4 P’s of marketing Product Price Promotion and Place. the application of those principles is the best way for any business to make or break them. For example there is a chain of Pizza restaurants in Melbourne called La Porchetta. They make fabulous food and it is cheap. Their pricing strategy is to turn over as much product as they can. Coupled with price they keep their restaurants full mostly every night of the week. I have seen them do as many (consistently) as 200 covers per night. So their strategy is to provide good food at an affordable price. When people buy they also buy drink at a price which makes them a lot of profit.
Their model is to make a small amount of profit many times, rather than a large amount of profit a small amount of times.
The owner died a millionaire. he always treated his people well and paid them the right money.
Business is not a contest between the worker and the boss. Its a skill that the owner has to manipulate to provide a worthwhile service to the customer for a reasonable price in the right place and if he gets it all right then he will be rich.
Whilst money is very nice and can get you lots of things it does not engender happiness or a good life. And when you die it doesn’t mean shit.
So if you want some advice then remember this lesson you will never learn in university or in many of the business models in modern Australia.
Oh and if you want to know my background. My parents owned a small business, I worked in it as well and I have a bachelors degree in Business. I have a much more important qualification and that is 60 years on this earth working for the people you seem to like so much. The ones who do well and are most admired are the ones who work with you not against you.
Thank you and I hope you do well in your law and commerce career.
If its so quiet on a sunday why dont they close, that way they dont have to pay anything and the ‘ workers’ will be able to enjoy themselves with family and friends.
just testing
Hey Todster did you hear the pin drop onto the floor.
Todster
This is more to do with March in March than Adelaide pubs.
Its hard to know how to make any sort of impact these days. Once upon a time I went on Anti-Vietnam demos. Maybe the March in March is the next best thing.
Watching the bit of video of the orange lifeboat carrying those sad people back to Indonesia, the mum fanning her child’s face to keep it cool in the heat – and it must have been hot, I had a kind of epiphany.
Thanks to John Howard, Australian society is a little like Ante-bellum America. Divided in two. Those who aren’t moved by the sight of the mum fanning her child’s face as they retreat from hope and those that are.
Those that aren’t are just a little like those solid citizens of the American South back in those days who couldn’t see a problem with slavery. The good ol’ boys. And girls.
why are we meant to feel more sorry for the people who pay off criminals to try and get settled here than for the refugees in UN camps who have been assessed as needing resettlement but whose places have been taken by those who paid off criminals (funny how people claim poverty after flying to indonesia they forking over ~$10k/head.)?
We resettle many refugees here in australia. People are just sick of being taken for a ride and taken for fools by the irregular arrivals.
Being wealthy (and I use this term loosely, since many of these maritime arrivals who have paid smugglers to bring them here have sold just about everything they own to foot the bill) does not guarantee your safety from persecution.
Being a refugee is not about being poor, it is about having a legitimate fear and expectation of persecution.
Dear AndyM
You illustrate my point perfectly. Those africans really enjoyed working from daylight to dark as well. No need for sympathy back then either.
You must have missed my point where I said “they (unions) do have a role in protecting the vulnerable from bosses who are bastards. ”
Or additionally: “Probably the main gripe that employers have with unions is when there is a sense of antagonism towards bosses irrespective of how decently they treat the workers.”
The coalition aren’t politically suicidal
Thanks again Victoria.
I’ve always wondered why Ms Warren’s remarks have never been broadcast more widely but it’s really pretty obvious.
I am almost certain that if any of the overhead expenses paid by the business owner were dropped, the savings would not be passed onto the customers but would go straight into the pocket as increased profit, which makes the call for lower wages a bit hollow.
Nothing short of a return to serfdom will satisfy the average business owner these days.
In some ways the only difference between a wage slave and one working in the cotton fields is that we have to feed and clothe ourselves. We are supposed to have the power of choice but what choices do we really have? Consumer ones at best.
Somebody may already be secretly training bar staff somehere in Dubai to replace the greedy locals. Fun days ahead as we go forward into the past..
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[…] thought reminded me why I stopped going to my local pub, when I saw a huge gold-framed notice from the owner on the wall (ironic much?) whinging about […]