Put the cork back in the champagne – the penalty rates deal struck between the state’s most powerful union and South Australia’s peak business body is more about pragmatism than transformation.

That’s not to say it won’t have some small benefits for retailers, but its effect seems likely to be limited.

The “template agreement” negotiated by the shop assistants’ union and Business SA allows for the reduction of penalty rates on Sundays from 100 per cent loading to 50 per cent, and reduces them on public holidays from 150 per cent to 100 per cent.

Penalty rates would also be abolished on Saturdays and weekday evenings under the agreement, which is voluntary for retailers but could affect up to 40,000 employees if adopted widely.

In return, the deal gives workers a guaranteed three per cent annual pay rise and the right to refuse to work on the weekend, while permanent workers get the right to take every second weekend off.

The deal only potentially applies to smaller retailers, with the retail workers’ union – the Shop, Distributive and Allied Employees’ Association (SDA) – already having struck many similar agreements with the big retail chains, without gaining much attention.

And any agreement based on the template won’t get through the Fair Work Commission if employees end up worse off than the award, which means businesses will need to carefully work through their rostering to gain a benefit.

What’s different about this agreement? Apart from the fact that it provides an easy template for “mum and dad” shop owners to strike their own bargain with workers, it depends on who you speak to.

For Business SA CEO Nigel McBride, the deal is a second-best compromise to bring some flexibility for retailers.

With the Federal Government indicating that it will not legislate to vary penalty rates – leaving any decision up to to the Fair Work Commission – McBride says the deal with the SDA is a “pragmatic compromise”.

It wasn’t a “champagne moment” for retailers in relation to penalty rates.

“This is a very limited compromise,” he told InDaily. “We should have a complete overhaul.”

In a statement earlier, he said that “as the peak chamber of commerce, we needed to provide a mechanism to give retailers some relief in regards to penalty rates”.

“The current system is not providing what is needed and this is evidenced by high business closures and unemployment.”

However, he said it showed the SDA had recognised that penalty rates were a barrier to retailers opening and employing people on Sundays and public holidays.

Not so, says SDA secretary Peter Malinauskas.

His take on it – in contrast to the line pushed in the story which was “dropped” to The Australian this morning – is not that the union has backed down on penalty rates, but rather that Business SA has bent to the process of Enterprise Bargaining.

Instead of seeking to strike down penalty rates enshrined in awards, business has seen the benefit in negotiating changes suitable to their particular circumstances.

Malinauskas pointed out the SDA had come to “dozens” of similar agreements with big retailers, where its members benefit by gaining higher base rates of pay, guaranteed yearly pay rises and better breaks and rostering provisions.

“It is also a great leap forward for workers covered by the Retail Award wanting time off by providing permanent workers rights to regular weekends off and the ability to spend Sundays and public holidays with their friends and family if they choose,” he said.

Business SA’s Nigel McBride

He said that while the agreement was voluntary, he hoped local retail businesses would adopt it.

He called on the Federal Government and employer groups to “stop their attack on penalty rates in the Fair Work Commission and in IR policy”.

However, McBride rejected this, saying today that Business SA would still be seeking to have the Fair Work Commission reduce penalty rates in the Retail Award.

“But there is no certainty that the commission will do this,” McBride said.

“Accordingly, this agreement at least gives retailers a viable option to make it easier to open and employ people on weekends and public holidays.”

The next step is for a retailer to use the template to come to an agreement with its employees. The agreement will then be tested in the Fair Work Commission.

The Australian Retailers Association is hoping the deal will be pushed out nationally.

“We’d be hoping that we see this kind of deal rolled out nationally,” ARA executive director Russell Zimmerman told AAP on Tuesday.

“We’re seeing that unions really do now understand that Sunday penalty rates at 100 per cent are unsustainable and it’s a decision that will help the industry. It’s a good start, in the right direction.”

As for this sort of arrangement being the start of a new dawn in penalty rates across other industries, Restaurant and Catering SA boss Sally Neville told InDaily today that she had no plans to strike a similar deal with the hospitality workers’ union, United Voice.

“We want the principle of penalty rates to be reviewed, not a collective agreement that carves away at this or that on a temporary basis,” she said.

Enterprise agreements, she pointed out, were temporary arrangements that needed to be renegotiated regularly.

However, she praised what Business SA had achieved for its smaller retail members, which she viewed as positive.

– with AAP