SMALL businesses are closing on Sundays and public holidays to avoid paying higher penalty rates.   

Retail and restaurant owners have been hit hardest by the regulations, which force businesses owners to pay the penalty rates, rather than allow the employer to negotiate a fixed worker wage for all days of the week.

Business SA chief executive Peter Vaughan said the new modern awards had increased the cost of employing, adding pressure to businesses throughout the state.

"Many (small businesses) are not able to pass on the extra costs to their customers, forcing them to reduce operating hours and jobs," he said.

"We have many local businesses in the tourism, hospitality and retail sectors that have seen their penalty rates go through the roof, which have forced them to cut costs and in some instances no longer open on the weekends."

He said the new laws have had a negative impact on productivity and employment.

"The Productivity Commission's recent draft report into the performance of the retail industry also raised concerns about the lack of flexibility and productivity of the Modern Retail Industry Awards," Mr Vaughan said.

Sully's on Semaphore cafe owner Andrew Sullivan said he would be hit with a pay increase of about 18 per cent plus superannuation to his employers in the next three years.

"It adds up, especially when you have to deal with electricity, gas and utilities going up by 10 per cent," he said.

Liquor Hospitality and Miscellaneous Union acting secretary David Gray said workers had a right to the modern award wage increases. 

"In the absence of any hard evidence, without any statistics to analyse, it is hard to comment on the effects of the rise," he said.

"The modern awards provide for workers who also have to pay their electricity and incoming bills."

But Mr Sullivan said it was getting harder to cover the rise in costs without eating too greatly into their already low profit margin.

"We can't just be passing that on to the customer, sometimes you can negotiate with your suppliers but I'm finding that quite often my wife and I just have to work more hours," he said.

Mr Sullivan has shortened the hours they are open on public holidays and often works more junior staff to compensate for rising costs.


Comments on this story

    Frazzle of Epping Posted at 2:19 PM September 03, 2011

       Its difficult to give too much credibility that businesses will close on Sundays purely because wages are increased by 18% due to penalty rates. It may be a factor, but given that fixed costs (rent, rates etc) have to be paid anyway the overall impact on the business will be diminished.

    John of Coffs Harbour Posted at 2:09 PM September 03, 2011

       good for them if they are not in a shopping centre, and therefore not subject to compulsory Sunday trading.

    Jimson of Gold Coast Posted at 1:53 PM September 03, 2011

       Go to the USA. When you are lucky enough to get a job, the pay rate is what it is, no matter which hours or days are worked. Not surprised this country is going backward with the amount of regulations instigated by so-called "Officials' who work 35 hours a week, Monday to Friday, for an obscenely high salary and are totally non-productive.


Read more: http://www.news.com.au/business/your-business/closed-shops-a-sunday-penalty/story-fn9evb64-1226128701687#ixzz1Wvw1S95H

So you run small businesses out of business unable to compete.

Shame you dont care about ordinary people like I do.

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Without the businesses the low income workers have no job.

Would you rather they have normal time work or no job at all?

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So how come its ok for people like me to work 12 hour days at time for a set salary and yet its not for these people?
What's the difference?

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No that's not relevant. It's not the actual figures, its the principle.

If these people want to be paid more for working over a certain time, then why shouldn't everyone?

They are normal workers and I bet I work a lot longer hours than many mate for no extra $$.

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Thing is mate, when you work in management in multi-nationals, you don't go with a "Sorry I haven't completed it in time because you didn't give me overtime"

HAHAHAHA