Penalty Rates

So, Labour Day; lovely sunny day, kids off school… we rode our bikes to a local cafe for lunch, as you do.

Nothing special about that, however, I was intrigued to read the above note stuck to the salt shaker on our table.

As you can see from the picture above it reads: “Please note there is a 10% surcharge on all transactions on public holiday.”

Apart from the lack of punctuation, I wondered if this had been introduced since the Fair Work decision to reduce penalty rates, or whether it had been around for a while at this cafe. (It was the first time I’d been here on a public holiday)

So I asked one of the staff if this was normal on a public holiday?

“Yes, we’ve done that for a while,” she said.

“Ok, so have your penalty rates for Sunday’s and public holidays been cut?”

“No, not that I know of… I couldn’t live without them to be honest, they are a big help when you’re studying,” she replied.

So, it got me thinking, how many cafes and restaurants already charge a premium on Sundays and public holidays, knowing that their wages bill will be higher on those days because of penalty rates?

I mean, after all, wouldn’t that just be prudent business practice to allow for higher costs on a particular day because, after all, penalty rates haven’t really been a big secret, have they? Anyone who has opened a business in the past 50 years must have factored in the higher wage costs on weekends and public holidays and balanced those off against an increase in trade. That’s just pretty simple business thinking isn’t it?

I have no idea how many establishments charge more on weekends to cover higher wages costs on  weekends and public holidays but it’s reasonable to assume many already do. So, presumably, a cut in the wages bill should lead to a reduction in overall costs, which should, theoretically flow through to the customers. Right?

IF this doesn’t, so if businesses continue to charge a 10% loading, even if that’s only on public holidays, then won’t the reduction in penalty rates simply flow into business profits?

I don’t go to cafe’s all that often on weekends and public holidays but I will be intrigued to see if, whenever these changes take place, the 10% surcharge is eliminated, or there is a reduction in prices on the menu. 

Watch this space!

 

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