Is It Ethical To Cut The Double Pay Rates On The Weekends In Australia?

Research Problem

Australians are majorly known for their hard work and their reputation for being ever ready to make sure the work is done. According to the Australian Council of Trade Unions (ACTU), apart from Korea, the Australian employees work for more hours than the rest of the Organisation for Economic Co-operation and Development countries (Campbell, 2001; Buchanan et. al, 2001). However, the twenty four hours do not seem to be sufficient for Australians to fit in everything. This has complicated the balance between work, family and social life forcing most of the parents to work for extended hours at work or with the children at home (Charlesworth, 2002; Hill et. al, 2001). In 2003, approximately 30.2% of Australian employees worked for more than the standard weekly hours (Allan et. al, 1998).

Additionally, less than half of the workforce in Australia works from Monday to Friday with only 7% working on a schedule of Monday to Friday (Watson et al 2003; Wooden & Drago, 2009). Research also shows that 30% of men and 11% of women in Australia work between 7am to 7pm both weekdays and weekends. But most of the women are found to work more on weekends between 6pm and 9pm, than on weekdays (Trewin et. al, 2015; Messenger, 2004; Wooden & Drago, 2007).

In 2012, out of the 9.5 million employees (single job holders) 60 % worked five days a week, 7% worked six days a week whereas 4% worked all the seven days in a week and 22% worked on both weekends (Pocock, 2005; Williams et. al, 2009). The number of employees that worked on weekdays only was 70%, where 29% worked during the weekends and weekdays. In comparison, out of 563,800 multiple jobholders 39% worked five days a week, those who worked seven days and six days a week were 19%. More employees worked on Saturdays compared to those on Sunday (37% and 26% respectively). More than half of the employees (57%) worked on both weekends and weekdays whereas 42% employees worked on weekdays only (Heron & Charlesworth, 2012; Connell, 2005).

There are many ethical and unethical issues that arise as a result of the cut of the double pay rates on the weekends in Australia. The Fair Work Commission has cited many reasons for pro-cutting the double pay rate. Some of the reasons are that reduced pay rates would lead to increased working hours and the availability of services over the weekends (Waring et. al, 2006; Dwyer & Leong, 2003). This move is also likely to give the employers an opportunity to employ more workers during the weekends (Masterman et al, 2007). However, some aspects in the move to cut the pay rates make it unethical.

Objectives of the study

The period of Weekends for most of the Australian casual workers is very crucial (Campbell, 1996). This period is characterized by a high turnover rate for employees due to the double pay rates Gornick & Jacobs, 1996; Dalton & Mesch, 1990). This creates a tremendous pressure for parents to strike a balance between work and family. As a result, the double pay is a compensation for the forgone social life, increased growth rate for businesses due to increased flow of income hence high rate of spending (ABS, 1998; Statistics ABO, 1993). On the contrary, the double pay rates on the weekend lead to prolonged hours of work, stress, unemployment, poor health status and loss of maternal touch to the family (Bratberg et. al, 2002; Glezer & Wolcott, 1999). Therefore, this study seeks to assess whether it is ethical to cut the double pay rates on the weekend in Australia.

To assess the causes and effects of long working hours on weekends in Australia
To assess the effects of pay cuts on the employee morale in Australia.
To determine the effects of pay cuts on the relationship between employee morale and general production.

What are the causes and effects of long working hours in Australia?
What are the effects of pay cuts on the morale of employees and general production in Australia?

The study will aim at providing information towards the decision of cutting the double pay rates on the weekend in Australia.

This chapter gives a detailed literature review based on the previous studies carried out in the field. The causes and effects of long working hours, the effects of pay cuts on the employee morale and lastly the effects on the relationship between employee morale and production.

Fagan (2001) has explored the concept of working time in relation to work and life balance and Figart & Golden (2013) on working time in relation to gender and management strategy and the effects on the economy.

In Australia, the inception of enterprise bargaining in place of working time has also lead to changes in the work place (Hancock, 2002). The Australian Just like the North American discussion regarding extended work time by Maume et. al (2001); the significant debate is that of long hours of work. Research shows that amongst the OECD countries, Australia has the highest share of workforce of over fifty hours in a week (Abhayaratna & Lattimore, 2006; ABS, 2003; Messenger, 2007). The progressive reduction of standard working hours from 35 to 40 hours per week and a sharp increase in the prolonged working hours has also been experienced since 1980 (Campbell, 2002: 94)..

Research shows that extended working hours have adverse effects on the health and safety of the worker (Peetz et al., 2003; Harrington, 2001; Spurgeon et. al, 1997) and the lucidity in the social life with friends and family (Pocock, 2001; Craig et. all, 2010). Furthermore, majority of the worker that overwork are desirous of working for lesser hours (Watson et al., 2003). Reducing the pay rates is unethical because it results to overwork which in turn reduces the time for quality leisure thus limiting the available time for building an effective marriage, parenting and social responsibility (Hancock, 2001; Reynolds& Aletraris, 2007). Additionally, long working hours limits the time for refreshing and regaining strength and the time for community work and advancing in acquisition of new skills and knowledge (Cheney et al., 2008).

Research questions

There is however, a great drawback to the belief that pay cuts are unethical. This concept maybe misleading because there are other significant considerations that are used in determining the hours that workers consume during work (Peetz et al., 2003). Therefore, the relationship between pay cuts and ethics is thus limited in application. For instance there are situations where the employees work for the extended hours at the agreed overtime rates. Thus the workers become the determinants of what is believed to be determined by the employers. Employees also end up working for long hours due to the fear that in case they work for the standard hours, the incomplete tasks will pile up and be carried to the following day.

According to Bittman (1998) the research further establishes the idea that long working hours are as a result of the Double Pay Rates on the weekends in Australia which indeed makes it unethical as per other quarters. Also, extended working hours are the main cause of injuries encountered at work and other employee illnesses. Moreover, the study established a relationship between the prolonged working hours and the effect on the individual lives of the employees. For instance, the cut on pay rates will directly take the money from the pockets of the workers who only work over the weekends and whose life is dependent on a weekly basis, the change will also deny the employees a normal social life for lack of compensation for the missed family time and events. The wage cuts will also reduce the income flow and thus minimize spending. The idea that employees have a say in the number of working hours has a weak foundation because when the factors that dispose the worker to working for long hours are considered, it is realised that they do not have control over those factors hence making the reduction of pay cuts unethical.

According to Peetz et al.(2003), pay cuts leads to long hours of working which in turn induces pressure on the workers either by signing out of work late, extending the office work to home or thinking that the workload is piling up in their absence. The findings from the study further revealed that the prevalence of illness and harm was as a result of long working hours. Also the culture of the workplace amongst various staffs is damaged by the pay cuts (Campbell, 1999). The pay cuts forces the employees to work for long hours so as to sustain their usual needs and thus they unconsciously fulfil the goals of the organization.

Significance of the study

According to Ahrens et. al (2015), the effort exerted by a worker is proportionate to the wage received (2014). The Downward Wage Rigidity concept by Solow and fair wage hypothesis by Akerlof are applied in the study (Ahrens et. al, 2015).

Chemin and Kurmann (2014) demonstrates that the pay cut is unethical since no respect is rendered to the affected employees because their input is not well-thought-out and the pay cuts have no justifications whatsoever. Moreover, the pay cuts place the employees in an obstinate position because the resistance to pay cuts is from the employers who in fear of the anticipation of the consequences of the reactions from the employees, they oppose the deductions (Bewley, 1998; Dawson, 2001). The argument that wage rigidity promotes untapped profits is without basis since the losses incurred by the business from the consequences of pay cuts is much higher than it would have achieved from lower wages (Chemin & Kurmann 2014).

The concept of reciprocity is forceful because it considers ethical factors such as beneficence and breach of promise. Findings from the study can be summarised into two; first, an increase in pay from the fair wage sparked a quick adaptation of the workers thus positively affecting the amount of effort by the worker in comparison to the offered pay. Secondly, the responses from the employees were negative to paying cuts even though the new wages were a little bit higher than the then current market rate. Therefore, wage changes affect the reciprocity of the employees in that the effort exerted by the employee at work is directly proportional to their wage. Thus the pay cuts on the double pay rates on the weekend in Australia would also affect the employer thus making the decision unethical.

Under normal circumstances the level of production increases with the work satisfaction. According to the research the level of output was not affected by the increase in the wages however, there was a reduction in production by 20 per cent as a result of pay cuts. Through the application of the model of inequality aversion and model of reciprocity the researcher found out that a relationship existed between high production and employee morale (Maréchal et. al, 2013).

This chapter describes the methodology used in the research study, the research design, the targeted population, sampling technique, the sample size and lastly the data collection and presentation techniques that were adopted by the study.

Literature Review

Research design

The study used descriptive research design in order to provide a framework to determine current conditions, trends and status of events in relation to working time. This was most appropriate for the study since it focused on describing independent variables. It helped the researcher to obtain current and factual information from the employees. Descriptive design was therefore the most appropriate for the study.

Target population

The targeted population of this study was employees working in 8 different organizations within Brisbane East, Queensland. These organisations comprised of a manufacturer, a bank, a government department, a hospital, a five star hotel and a retailer. These involved full-time, part-time and casual- workers.

Sampling Techniques

The research adopted systematic sampling technique to realize the sample size for the study.

Sample Size

The population of employed persons in Brisbane East, Queensland is estimated to be 124,200 (Basin, 2016). This study targets 0.2% of the population as the sample size. Which translates to around 200 employees for the purpose of this study to deduct the conculusions and data needed for the study.

Data collection techniques

The study relied on primary data which was collected using structured questionnaires . The structured questions were used in an effort to conserve time and money as well as to facilitate an easier analysis as they are in an immediate usable form.

The questionnaire consisted of the following sections; expressions of extended hours, pay cuts and pay increases on employee morale, and employee morale and production.

The questionnaires were distributed to the respective employees; ten weeks was given to them to fill the questionnaires after which they were collected.

Data analysis and presentation

The collected data was analyzed using Ms Excel for any inconsistencies, then presented in the form of charts and graphs.

Table 4.1 How many hours do you work each week including overtime and extra hours (all employees with and without children).

Table 1Table 4.1 How many hours do you work each week including overtime and extra hours

No. of hours worked each week including weekends	%No. of employees With children No children
35-40	2	8
41-45	3	6
46-50	39	43
51-55	26	28
56-60	27	13
Over 60	3	2

The table 4.1 above shows the distribution of the number of employees with and without dependants according to the number of hours worked on a weekly basis after pay cut. Majority of the employees in Brisbane East that worked extra time took between 46-50 hours followed by those who worked for 51-55 hours. This study found out that Working for long hours as a result of pay cuts puts pressure on employees with dependants or families to work for extended hours (46-50 hours) including weekends so as to provide the family needs. This becomes detrimental to the marriage or family because the employees do not have quality time for their families.

Table 4.2 Does work pile up when you work for standard hours?

Table 2Table 4.2 Does work pile up when you work for standard hours

No. of hours worked each week including weekends	%No. of employees
35-40	16
41-45	30
46-50	40
51-55	9
56-60	4
Over 60	1

Table 4.2 shows the distribution of the number of employees who had fear of work piling up if they did not work extra hours over the weekend in Brisbane East; approximately 40% of employees taking between 45-50 hours received the highest accumulation of work while only 1% of employees working over 60 hours weekly received the least accumulated work while away. From the study, majority of the employees work for 46-50 hours including weekends due to the fear of building up of work.

Table 4.5 Effects of pay cuts on employee morale

Table 5Table 4.5 Effects of pay cuts on employee morale

No. of hours worked each week including weekends	% no of employees reported to work consistently before pay cut	% no of employees reported to work consistently after pay cut
35-40	10	7
41-45	14	10
46-50	44	34
51-55	18	15
56-60	12	10
Over 60	2	1

The table 4.5 above shows the effects of pay cuts before and after pay cuts on employee’s morale according to the number of hours worked each weak. Only 34% of the employees consistently reported to work after pay cut compared to 44% before the pay cut while only 1% consistently reported to work after pay cut compared to 2% before pay cut in Brisbane East. The study found out that there exist a direct link between the effort the employee puts on work and the wage. The employees that worked for 46-50 hours per week were highly affected by the pay cuts and therefore demoralised to the extent of not actively reporting to work during the period of study.

No. of hours worked each week including weekends	% of production output before pay cut	% of production output after pay cut
35-40	14	11
41-45	23	17
46-50	42	30
51-55	13	12
56-60	6	8
Over 60	2	1

The table 4.6 above shows the effects of pay cuts on the general production output before and after deductions on employee’s morale according to the number of hours worked each week. There was 12% reduction of production output after pay cut compared to 42% out put before pay cut for employees working for 46-50 hours while only 1% output after pay cut compared to 2% output before pay cut in Brisbane East. The research indicated a general reduction of production output by 20% due to pay cuts therefore according to the study, the production output decreases with the decrease in employee morale.

It would be recommended that the Australian commission to further consider the negative impacts of pay cuts on the various aspects of the employee’s life and on the employer. The various experts and institutions in this field should come out and clearly offer their assistance. Wages have a great influence not only on the employee but also on the economic growth of the state and thus pay cuts demand a lot of concern from the government. It therefore behooves the experts in this field to provide the needed information in this regard.

Based on the findings from the study, it is recommended that the constitutional Act regarding labor be amended in order to include detention and high penalty against employers who violate the regulation on the standard working hours. Also, the fine penalty against illegal dismissal from duty by the employer for claiming or exercising employee rights should be tightened.

In order to curb the problem of long working hours more so in non-governmental organizations, a law of minimum wage should be enacted in the private sector. Additionally, employers should receive professional trainings on the consequences of extended working hours both to the organization and to the workers. Emphasis should also be laid on the objectives of regulating working time.

The government in coordination with the Bureau should create legal awareness to the workers and employers on the working time regulations. For the employees to have synergy and bargaining power, an effort should be made to empower the trade unions.

This research paper has outlined the various reasons why the pay cut on the double rates on weekends in Australia is unethical. The findings from the study are not conclusive and therefore further research is necessary to deal with the continued working for long hours in Australia.

Further research should be conducted on the effects of long working hours on the mental status of the worker due to the pay cut before the effect on the output is realized. Additional studies should be done to find out whether the standard 38 hours working hours per week is appropriate depending on the current economic status. The study should also include the short term effects of working for long hours for instance after a day and the long-term effects for instance after a week or a month.

Conclusions

This research paper has outlined a number of the causes and consequences of long working hours as a result of pay cuts on both the employee and by extension to the employer. For instance, fear of piling up of work consequence of pay cuts pressures the employees to work for long hours to sustain their needs and as a result employees end up taking work home, suffering from work related injuries and illnesses, demoralization at work hence poor production and lack of quality time for families. The findings further suggest that long working hours affect personal lives of employees and can be attributed to the cause of weak marriages and lack of social responsibility from the employees because of the combination of pressure on employees and lack of leisure time. In consideration of the above findings, it will therefore be unethical to cut the double pay rates on the weekend in Australia.

References

Abhayaratna, J. and Lattimore, R., 2006. Workforce Participation Rates-How Does Australia Compare?

Ahrens, S., Pirschel, I. and Snower, D.J., 2015. Path-Dependent Wage Responsiveness.

Allan, C., Brosnan, P. and Walsh, P., 1998. Non-standard working-time arrangements in Australia and New Zealand. International journal of Manpower, 19(4), pp.234-249.

Australian Bureau of Statistics (ABS), 1998. How Australians use their time.

Australian Bureau of Statistics, 2003. Australian labour market statistics. Australian Bureau of Statistics.

Basin, M., 2016. northern Australia. Geochim Cosmochim.

Bewley, T.F., 1998. Why not cut pay?. european economic review, 42(3), pp.459-490.

Bittman, M., 1998. The land of the lost long weekend? Trends in free time among working age Australians, 1974–1992. Loisir et société/Society and Leisure, 21(2), pp.353-378.

Bratberg, E., Dahl, S.Å. and Risa, A.E., 2002. ‘The double burden’: do combinations of career and family obligations increase sickness absence among women?. European Sociological Review, 18(2), pp.233-249.

Buchanan, J., van Wanrooy, B., Considine, G. and Bretherton, T., 2001. Working time arrangements in Australia: A statistical overview for the Victorian Government. ACIRRT, Sydney.

Campbell, I. and Brosnan, P., 1999. Labour market deregulation in Australia: the slow combustion approach to workplace change. International Review of Applied Economics, 13(3), pp.353-394.

Campbell, I., 1996. Casual employment, labour regulation and Australian trade unions. Journal of Industrial Relations, 38(4), pp.571-599.

Campbell, I., 2001. Cross-National Comparisons: Work time around the world. ACTU.

Campbell, I., 2002. Extended working hours in Australia. Labour & Industry: a journal of the social and economic relations of work, 13(1), pp.91-110..

Charlesworth, S., Campbell, I., Probert, B., Allan, J. and Morgan, L., 2002. Balancing work and family responsibilities.

Chemin, M. and Kurmann, A., 2012. Do Workers Feel Entitled to High Wages? Evidence from a Long-Term Field Experiment (pp. 1-44). Working Paper.

Cheney, G., Zorn Jr, T.E., Planalp, S. and Lair, D.J., 2008. Meaningful work and personal/social well-being organizational communication engages the meanings of work. Annals of The International Communication Association, 32(1), pp.137-185.

Connell, R.W., 2005. A really good husband: Work/life balance, gender equity and social change. Australian Journal of Social Issues, 40(3), p.369.

Craig, L., Mullan, K. and Blaxland, M., 2010. Parenthood, policy and work-family time in Australia 1992—2006. Work, Employment and Society, 24(1), pp.27-45.

Dalton, D.R. and Mesch, D.J., 1990. The impact of flexible scheduling on employee attendance and turnover. Administrative Science Quarterly, pp.370-387.

Dawson, D., McCulloch, K. and Baker, A., 2001. Extended Working Hours in Australia: Counting the Costs:[home Page]. Centre for Sleep Research, University of South Australia.

Dwyer, J. and Leong, K., 2003. Nominal wage rigidity in Australia. Australian Journal of Labour Economics, 6(1), p.5.

Fagan, C., 2001. Time, money and the gender order: work orientations and working?time preferences in Britain. Gender, Work & Organization, 8(3), pp.239-266.

Figart, D.M. and Golden, L. eds., 2013. Working Time: International trends, theory and policy perspectives. Routledge.

Glezer, H. and Wolcott, I., 1999. Work and family life. Family Matters, 52, pp.69-74.

Gornick, J.C. and Jacobs, J.A., 1996. A cross-national analysis of the wages of part-time workers: Evidence from the United States, the United Kingdom, Canada and Australia. Work, Employment and Society, 10(1), pp.1-27.

Hancock, L., 2001. Precarious Work, Over-work and Family Time. Growth, (49), p.25.

Hancock, L., 2002. The care crunch: changing work, families and welfare in Australia. Critical social policy, 22(1), pp.119-140.

Harrington, J.M., 1978. Shift work and health: a critical review of the literature. HMSO.

Harrington, J.M., 2001. Health effects of shift work and extended hours of work. Occupational and Environmental medicine, 58(1), pp.68-72.

Heron, A. and Charlesworth, S., 2012. Working time and managing care under Labor: whose flexibility?. Australian Bulletin of Labour, 38(3), p.214.

Hill, E.J., Hawkins, A.J., Ferris, M. and Weitzman, M., 2001. Finding an extra day a week: The positive influence of perceived job flexibility on work and family life balance. Family relations, 50(1), pp.49-58.

Maréchal, M., Kube, S. and Puppe, C., 2013. Do wage cuts damage work morale? Evidence from a natural field experiment.

Masterman-Smith, H.L. and Elton, J., 2007. Cheap labour: the Australian way (Doctoral dissertation, Association of Industrial Relations Academics of Australia and New Zealand).

Maume Jr, D.J. and Bellas, M.L., 2001. The overworked American or the time bind? Assessing competing explanations for time spent in paid labor. American Behavioral Scientist, 44(7), pp.1137-1156.

Messenger, J.C., 2004. Working time and workers’ preferences in industrialized countries: finding the balance. Routledge.

Messenger, J.C., Lee, S. and McCann, D., 2007. Working time around the world: Trends in working hours, laws, and policies in a global comparative perspective. Routledge.

Peetz, D., Townsend, K., Russell, B. and Houghton, C., 2003. Race against time: Extended hours in Australia. Australian Bulletin of Labour, 29(2), p.126.

Pocock, B., 2001. The effect of long hours on family and community life. Queensland Department of Industrial Relations, Brisbane, Australia.

Pocock, B., 2005. Work/care regimes: Institutions, culture and behaviour and the Australian case. Gender, Work & Organization, 12(1), pp.32-49.

Reynolds, J. and Aletraris, L., 2007. Work–family conflict, children, and hour mismatches in Australia. Journal of Family Issues, 28(6), pp.749-772.

Spurgeon, A., Harrington, J.M. and Cooper, C.L., 1997. Health and safety problems associated with long working hours: a review of the current position. Occupational and environmental medicine, 54(6), pp.367-375.

STATISTICS, A.B.O., 1993. How Australians Use their Time. Canberra: Cat, (4153.0).

Trewin, D. and Hall, J., 2005. Measures of Australia’s Progress–A Case Study of a National Report Based on Key Economic, Social and Environment Indicators. Statistics, Knowledge and Policy: Key Indicators to Inform Decision-Making, pp.88-103.

Waring, P., de Ruyter, A. and Burgess, J., 2006. The Australian fair pay commission: Rationale, operation, antecedents and implications. The Economic and Labour Relations Review, 16(2), pp.127-146.

Watson, I., Buchanan, J., Campbell, I. and Briggs, C., 2003. Fragmented futures: New challenges in working life. Federation Press.

Williams, P., Pocock, B. and Bridge, K., 2009. Linked up lives: putting together work, home and community in ten Australian suburbs. Overview Report. Adelaide: Centre For Work+ Life. University of South Australia.

Wooden, M. and Drago, R., 2007. Melbourne Institute Working Paper Series.

Wooden, M. and Drago, R., 2009. The changing distribution of working hours in Australia. Laggards and leaders in labour market reform: comparing Japan and Australia, Routledge, London, pp.67-81.