Fair Work Penalty Rates Decision

Source: The Fair Work Commission

The Fair Work Commission has today announced that Sunday and Public Holiday penalty rates are to be cut across Hospitality, Retail, and Fast Food Awards, while Saturday penalty rates are to remain the same.

Changes to Sunday Penalty Rates

Sunday penalty rates for full time and part time hospitality workers will be reduced from 175% to 150%, rates for casuals will remain the same at 175%.

Level 1 Employees under the Fast Food Award will see a reduction in Sunday penalty rates from 150% to 125% for full-time and part-time employees. Casuals will have a reduction from 175% to 150%. No changes will be made to Sunday penalty rates for Level 2 and Level 3 Employees under the Award.

Full time and part-time retail workers will have Sunday penalty rates reduced from 200% to 150%. Casual Sunday rates for retail will also be reduced from 200% to 175%.

Changes to Public Holiday Penalty Rates

Public holiday rates for full-time workers in hospitality will be reduced from 250% to 225%, with no change for casual Public Holiday penalty rates.

Changes to Public Holiday rates will come into effect July 1, 2017. However, The Commission has stated that the immediate implementation of updated Sunday penalty rates would create undue financial distress for Sunday workers. As such transitional arrangements for Sunday penalty rate changes will be made in the coming months.

The decision was handed down after more than eight months of deliberation, and comes after The Productivity Commission recommended bringing Sunday penalty rates into line with Saturday rates in 2015.

This is the biggest Industrial Relations decision The Fair Work Commission has made in recent years. It is hoped that reducing penalty rates will bring  about more ‘positive employment effects’ for businesses, and will “lead to increased trading hours, an increase in the level and range of services offered on Sundays and Public Holidays and an increase in overall hours worked.”

With the outcome of the decision expected to come into play later this year, it is crucial that business owners have the correct tools and processes in place to update changes to wage rates correctly, and better manage their labour costs to capitalise on the penalty rate reductions.