Fair Work Commission Makes Revisions To Penalty Rate Changes

6 June 2017
In a small win for affected employees, the Fair Work Commission (FWC) has ruled that its forecasted changes to penalty rates will not be fully implemented until 2020.

Fair Work Commission Makes Revisions To Penalty Rate Changes

After deciding in February that the pre-existing Sunday penalty rates across the fast food, hospitality, retail, and pharmacy industries did “not achieve the modern awards objective”, the Fair Work Commission has since decided to stagger its planned cuts to penalty rates.

July 1 will see the implementation of a 5% cut to Sunday penalty rates for the aforementioned industries; more significant cuts for fast food and hospitality employees are pencilled in for 2018/19.

Additionally, penalty rates for public holidays will see a 25% reduction as of July 1 for fast food, hospitality, restaurant, retail, and pharmacy workers.

The FWC’s decision is based on their finding that currently penalty rates “over-compensate” workers for Sunday work, and did not “provide a fair and relevant minimum safety net”.

“Given this conclusion, we are not satisfied that it is appropriate to impose any further delay in the implementation of our decision,” said the commission’s full bench in their decision released yesterday.

However, they did note that implementing the full cut to Sunday rates on July 1 would have only provided employees with four months of effective notice, hence the staggered implementation.

“In these circumstances, it is appropriate that the first step in the transition be smaller than subsequent steps,” the commission said.

Full- and part-time workers in the retail and pharmacy industries will see their Sunday penalty rates reduced from 200% to 150%; however, these reductions will be staggered between now and 2020.

Similarly, fast-food employees currently enjoy Sunday rates of 150%, but will see these reduced between now and 2019, and hospitality workers will see their Sunday rates fall from their current 175% to 150% over the same period.

Opposition Leader Bill Shorten slammed the “appalling” decision, saying that “it doesn’t matter if the cuts are phased in over two or three years, the damage is the same – people will be losing real money”.

He also said that the FWC’s ruling “confirmed the worst fears of workers,” and pointed out that it “comes at a time when wages are falling in real terms”.

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