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Dairy workers penalty rates too high to compete globally, Fonterra

Managing director for Fonterra Australia, Judith Swales is calling for a review of penalty rates for dairy workers to make Australian food manufacturers and processors more competitive in the global marketplace.

Swales is suggesting that Australia adopt a similar system to the one that is currently in place for the dairy industry in New Zealand where work hours correlate with seasonal milk supply, a suggestion that has been rejected by union officials SMH reports.

''Essentially you are not legislating that people have to work 38 hours a week, 48 weeks a year,'' said Swales. ''They can work longer hours without penalty [during peak supply periods] but then they get time off either side of the peak.

''It's more flexible, it's more in keeping with nature as opposed to forcing it for labour rules.''

President of the Australian Council of Trade Unions, Ged Kearney said that the cutting of penalty rates may increase profit to some extent, but also runs the risk of reducing productivity at the same time by creating a “disenfranchised and demotivated” workforce.

''You do not increase productivity by increasing profit. They are two different things,'' said Kearney.

''Employing cheaper labour or imported labour … could decrease the amount of milk you produce because people don't understand the industry, they're less motivated, they don't want to be there because they're not getting penalty rates.''

However Swales says that a change in the cost base is imperative if Australia wants to compete on a global scale.

“I think more flexibility, not to disadvantage people but to make us more competitive, is kind of the name of the game,” she said.

''If we want to be serious players on a global scale we have to have seriously competitive and efficient manufacturing operations.

''You could argue it's one of the issues for car manufacturing. We didn't have a globally competitive manufacturing cost base in terms of some of the enterprise agreements and maybe some of the technology. In dairy we are no different.''

Noel Campbell, president of Australian Dairy Farmers said that he doesn’t think that penalty rates should be removed entirely, but believes that the system should offer more flexibility.

''Under the pastoral award rate, if you are feeding or watering stock you only have to pay time-and-a-half because that's seen as an essential service. I'm sure cows would think being milked is an essential service and I'm sure if the RSPCA was asked about it they'd say cows needed to be milked twice a day no matter if it's a Sunday or Tuesday.

''Therefore we think it should become an essential service and the penalty rates would be time-and-a-half rather than double time.''

 

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