adelaide mushrooms submission

8/6/2019 Adelaide Mushrooms Submission

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ADELAIDE MUSHROOMS81 PANALATINGA ROAD, WOODCROFT, S.A. 5162

PHONE 08 83221234, FAX 08 83221234, EMAIL [email protected]

SUBMISSION

Adelaide Mushrooms hereby submits that the Australian Fair Commission shouldtake into account the following consideration of the appropriate wage levels in theupcoming wage review.

The need to ensure that piece rates which are flexible and are unconstrainedby the value of hourly rates without having regard to the average capacity ofan employee to earn under the piece rate.

The need to ensure that wage set properly reflects the Award rationalizationprocess and protects outcomes in terms of wages and classifications that havealready been achieved through enterprise bargaining

The need to ensure that economic differences between regions withinAustralia are maintained and do not place undue pressure on regions withweaker economics particularly in rural and regional Australia

To enhance the capacity of the unemployed and low paid to get and keep ajob.

Douglas SchirripaChairmanAdelaide Mushrooms25th, July 2006

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mailto:[email protected]:[email protected]


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1 Introduction

Adelaide Mushrooms (AM) welcomes the opportunity to provide a writtensubmission and comment on issues for consideration by the Australian Fair Pay

Commission (the Commission).

AM is in the top five of major producers of fresh mushrooms in Australia with farmsin Adelaide (Woodcroft and Murray Bridge) and in Tasmania (Spreyton and HuonValley).

AM is a family owned Company that has grown significantly over past years to be amajor force within the Mushroom Industry.

The four farms all located in Regional areas or areas of high low socio-economicclimate with many unskilled, untrained workers that need and want employment.

Overall some 220 employees from 20 different ethnic back grounds are

employed at the four sites.

All are trained by the Company and work on a piece rate system to which they arehappy with. This allows them to work hard and earn more per hour. In some cases itallows them just to have a job and earn valuable dollars.

Time is very limited for submissions but the Company is willing to attend any hearingor submit further information to assist the commission in putting forward anappropriate decision.

2. the role of the Commission

Wage setting functions are many but some of the more appropriate ones includethat the Act specifically provides that the objective of Commission performing itswage setting functions is to promote the prosperity of the people of Australia havingregard to four factors

the capacity for the unemployed and low paid to obtain and remain inemployment

employment and competitiveness across the country provide a safety net for the low paid, and provide minimum wages for juniors, those in training and employees with

disability to ensure those employees are competitive in the labour market.

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3. The importance of piece ratesOur Company makes use of piece rates as a basis for the fair and equitableremuneration of its employees. In functions like picking there is a direct link betweenwork performed and the volume harvested.

Piece rates are important to the Company because it allows both us and the employeesto focus on maximizing yield while guaranteeing flexibility.

Piece rates reward the more productive and efficient workers and also encourages

poorer performers to increase output.

Piece rates also helps the company guarantee certain cost per unit produced which isparamount in our industry.

4. Average Capacity.The Act has a provision to cover this topic.

It is the Companys belief that the average capacity should be based on the industrysaverage picking rate and not based on the minimum wage set.

This means that the minimum pay should be based on the ability of the employee topick what is regarded as the Companys or even the Industrys average kilo rate perhour.

However it is important to realize that if a minimum dollar value is set this encouragessome employees to not pick at the average but below it, as they will still get paid.

Generally across all our farms 90% of pickers are earning well above the minimumwage with some 30% earning up to one and half times the minimum rate per hour.

However there are an extreme few who choose not to reach the minimum averagebecause they are unwilling to try or in some cases just want to work. If a minimumwage is set these employees will continue to under achieve and will therefore lose

their jobs.

Therefore if the Commission sets piece rates without reference to the Industry

average, then some employees will be rewarded for working below the average

capacity of the Industry.

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5. Implications of piece rates not subject to industry average.This would cause major problems for management, payroll and work place culture.

It is important to set piece rates at a level which encourages employees to be productiveand efficient to motivate them to exert effort. A floor in the piece rate reducesincentive to do so.

This could result in profitable businesses currently on piece rates not able to continue tooperate in the same way and in fact may cease to be viable.

The fairness of piece rates is that an employee must be given a fair opportunity and afair piece rate, with the ability to earn over and above the minimum wage set down.

If piece rates are set to a minimum wage rather than the Industry average pick there will

be a lack of fairness in comparing the average capacity and hourly wage employeeswith piece rate employees. The profitability of companies that currently use the piecerate could be decreased significantly due to under performance or the scaling down ofrates rather than at present where employees endeavor to improve and pick at a fasterrate.

This could and would result in some of these otherwise unskilled employees not

being employed at all

6. Award rationalizationThe Work Choices legislation included award rationalization and simplification.

One of the aspects on piece rate was enabling the employee the ability to earn over andabove the minimum. By changing this aspect if not following the Industry average in butinstead favouring of a minimum wage the Commission would be changing the wholeaspect of piece rates.

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9. Employment and competitiveness across the country.As mentioned at the beginning we are employers of staff from lower socio-economicstrata of the communities south of Adelaide, regional South Australia, and regionalTasmania. Also we have numerous ethnic non English speaking refugees and visa

holders employed.

These areas are not as vibrant and relatively weak economic conditions unable tosustain links against the stronger socio economical areas yet the need for work andincome is more important.

It is therefore essential that the simplified Australian Pay and Classification Scales

reflect at best the minimum wage in areas with the weakest economic conditions

and at worst allow for some variation between weak and strong economic

environments.

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