Fair Work Announces Penalty Rates Transitional Arrangements

Katrina Marquez

5 June 2017    |   

Today the Fair Work Commission has released its decision regarding the Transitional Arrangements to the changes in penalty rates. On February 23 2017, the Fair Work Commission released its decision to amend Sunday and Public Holiday penalty rates in a number of Modern Awards. Sunday Penalty Rate Changes Sunday penalty rates will be reduced to 150% for full-time and part-time employees under the Hospitality Award, the Retail Award, and Pharmacy Award. Sunday penalty rates will be reduced to 175% for casual employees under the Retail and Pharmacy Award. The Sunday penalty rate for casual employees under the Hospitality Award remains unchanged at 175%. Sunday penalty rates for Level 1 Fast Food Award employees will also be changed. Full-time and part-time employees will see a reduction to 125%, and casual employees will see a reduction to 150%. Public Holiday penalty rates were also reduced for the Hospitality, Retail, Pharmacy, Fast Food and Restaurant Awards. The Fair Work Commission faced backlash over the decision, with many employee industry groups citing that a reduction in penalty rates would leave the ‘most vulnerable’ workers worse off as a result of taking home less pay. The Commission has today announced that it was not sufficiently persuaded that the impacts were substantive enough to not go ahead with the proposed changes, citing the positive employment benefits as more significant. It has also rejected the SDA’s request of introducing different transitional arrangements for current staff and employees employed after July 1 2017, as it would potentially create significant disharmony between employees, and additional complexities for employers transitioning to the new penalty rates. As such, the Fair Work Commission has announced its Transitional Arrangements for the relevant Modern Awards, these are outlined below. Transitional Arrangements to Penalty Rates Transitional Arrangements Fast Food Award Source: Fair Work Commission Transitional Arrangements Hospitality Award Source: Fair Work Commission Transitional Arrangements Retail Award Source: Fair Work Commission Transitional Arrangements Pharmacy Award Source: Fair Work Commission Proposed Changes to Public Holiday Penalty Rates The proposed changes to Public Holiday penalty rates will take effect July 1 2017, without transitional arrangements. Source: Fair Work Commission   For more information on the Transitional Arrangements made to the aforementioned Awards, please visit the Fair Work Commission website.

Today the Fair Work Commission has released its decision regarding the Transitional Arrangements to the changes in penalty rates.

On February 23 2017, the Fair Work Commission released its decision to amend Sunday and Public Holiday penalty rates in a number of Modern Awards.

Sunday Penalty Rate Changes

Sunday penalty rates will be reduced to 150% for full-time and part-time employees under the Hospitality Award, the Retail Award, and Pharmacy Award.

Sunday penalty rates will be reduced to 175% for casual employees under the Retail and Pharmacy Award. The Sunday penalty rate for casual employees under the Hospitality Award remains unchanged at 175%.

Sunday penalty rates for Level 1 Fast Food Award employees will also be changed. Full-time and part-time employees will see a reduction to 125%, and casual employees will see a reduction to 150%.

Public Holiday penalty rates were also reduced for the Hospitality, Retail, Pharmacy, Fast Food and Restaurant Awards.

The Fair Work Commission faced backlash over the decision, with many employee industry groups citing that a reduction in penalty rates would leave the ‘most vulnerable’ workers worse off as a result of taking home less pay. The Commission has today announced that it was not sufficiently persuaded that the impacts were substantive enough to not go ahead with the proposed changes, citing the positive employment benefits as more significant. It has also rejected the SDA’s request of introducing different transitional arrangements for current staff and employees employed after July 1 2017, as it would potentially create significant disharmony between employees, and additional complexities for employers transitioning to the new penalty rates.

As such, the Fair Work Commission has announced its Transitional Arrangements for the relevant Modern Awards, these are outlined below.

Transitional Arrangements to Penalty Rates

Transitional Arrangements Fast Food Award

Source: Fair Work Commission

Transitional Arrangements Hospitality Award

Source: Fair Work Commission

Transitional Arrangements Retail Award

Source: Fair Work Commission

Transitional Arrangements Pharmacy Award

Source: Fair Work Commission

Proposed Changes to Public Holiday Penalty Rates

The proposed changes to Public Holiday penalty rates will take effect July 1 2017, without transitional arrangements.

Source: Fair Work Commission

 

For more information on the Transitional Arrangements made to the aforementioned Awards, please visit the Fair Work Commission website.

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Easter Penalty Rates 2015 — What you need to know about paying staff

Easter is coming up soon, and that means two things! A new season of Game of Thrones to feast on, and – perhaps less excitingly – public holiday rates to pay staff. As a business owner, accountant, or bookkeeper, it’s important to be aware of how public holiday rates over Easter and ANZAC Day should be paid in your state. First, let’s see when the holidays will be in 2014. You might be surprised! If your business is open on any of these public holidays, you’ll need to pay staff the appropriate public holiday rates. You should check your award, which will tell you exactly what multiplier or penalties to apply, often under a Public Holidays section. A common multiplier is 2.5x. Some businesses pay staff salaries, or pay casually “above award”. Public holiday penalties still apply! If you have a contract, it should cover this – check with Fair Work if you are unsure. Staff who don’t work on a public holiday If you have full or part time staff who should have worked on any of the weekday public holidays – Good Friday, Easter Monday, and Easter Tuesday in specific cases – they are still entitled to pay, even if they do not work. Generally you’ll pay at base rate for the hours staff would have been entitled to. Of course, if staff do work on the day, you’ll pay at a higher rate as dictated by the award (see above). But keep in mind: this only applies if they usually work on that day. For example, a part timer in Queensland who generally works Tuesday to Thursday probably wouldn’t get paid the public holidays because there’s no public holiday on those weekdays. Check your award/agreement to be sure! If your award dictates how rostered days off work, you should check to see if staff with an RDO on a public holiday are still paid. In some states, some kinds of businesses are not permitted to open on public holidays due to trading regulations. If this applies, you will probably still be required to pay staff who would otherwise work on that weekday. Again, if you’re not sure, it’s best to ask. Staff who work on a day that isn’t a public holiday Keep in mind that the rest of the award doesn’t shut off just because it’s Easter. For example, if you are in Tasmania and pay Saturday rates, you’ll still need to pay these on Easter Saturday (which is not a public holiday for you). Tell me some more interesting facts about payroll around public holidays Did you know… If an employee takes sick leave around a public holiday (eg. Thursday April 24 to Monday April 28), they still get paid the public holiday if they were otherwise supposed to work that day (ie. full/part time) If an employee takes annual leave, public holidays during the leave period don’t count towards their annual leave balance Public holidays do not need to be paid for staff on unpaid leave Staff cannot be forced to work on a public holiday if they have reasonable grounds for doing so. Common reasons include: the amount of notice given, family responsibilities (especially over Easter), and whether one could reasonably expect the business to be open on a public holiday. Tanda’s employee time clocks automatically interpret industry awards – including public holidays – so you can be sure you paid staff right, without tedious manually data entry Where can I get help? Add the Fair Work Infoline to your speed dial, they are always happy to help. The number to call for any payroll queries is 131 394. What’s your favourite easter treat? We’re impartial to Lindt chocolate bunnies. Yum. Note: none of the above constitutes formal payroll advice. Always check with your accountant, bookkeeper, or Fair Work.

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Greens MP introduces franchise wages bill

A new bill called the Fair Work Amendment (Recovery of Unpaid Amounts for Franchisee Employees) Bill 2015 was introduced to Parliament last week. The bill, sponsored by Melbourne Greens MP Adam Bandt, is a direct response to the recent 7-Eleven saga, in which the Fair Work Ombudsman has already found over $600,000 in underpaid wages and entitlements. The bill aims to prevent this by making the franchisor responsible for correcting underpayments if the franchisee is not able to pay staff correctly and on time. You can read the text of the bill here, as well as its explanatory memoranda. Nobody would argue that it’s fair how 7-Eleven staff were underpaid, but this bill skirts a fine line that all franchisors should be aware of. The bill is written in the typical legalese of the Fair Work Awards and the National Employment Standards, but the gist of it is: If a franchisee employer does not pay an employee by pay day, then the employee, or someone acting on their behalf, can give the franchisor a written demand for payment. The employee doesn’t need to do this immediately. They have 6 years from the pay day in which they can make this request. The franchisor has 14 days to pay the employee what they’ve requested. If the franchisor doesn’t pay the employee within the given 14 days, the employee (or a lawyer) can take the franchisor to court. So if the franchisor disagrees with the employee’s written request… it must go to court! The court must add interest to the amount already owed to the employee. This interest is calculated from the pay day (so at this point it’ll already be 14 days worth). In short, if this bill became law, every franchisor in Australia would have unknown liabilities on their books for the wages of everyone who’s ever worked at one of their franchises any time in the past 6 years. And they could get these written notices if a franchisee gets their payroll out an hour late. This bill could certainly set a precedent for even more responsibilities for head office over what franchisees are doing. We think this could significantly change the dynamics of franchise agreements and cause a lot of headaches. It’s important for franchises to be ready for this sort of thing. Whether mandated by law or common sense, as a franchisor you need to be sure that your franchisees aren’t doing dodgy things with payroll that are going to see your brand on the front page of the Australian.   About the author Jake Phillpot is a Director of Tanda, a specialist time and attendance company focusing on the interpretation of Australian Modern Awards and Enterprise Agreements. Tanda maintains templates of popular Modern Awards including Fast Food, Hospitality, Retail, and Restaurant. These templates include the Fair Work mandated minimum wages of all levels of staff, as well as rules for penalty rates, allowances, and overtime based on the times that staff worked. For more information, read a Franchise Case Study with Red Rooster or call Jake on 1300 859 117. You can also request an enterprise POA.

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Sunday Penalty Rates: What’s really happening?

The national debate on penalty rates is quickly shaping up to become a defining issue of the Turnbull government and the next Federal election. The debate on penalty rates cuts straight to the bone of modern political disagreement and draws a line straight down one of the most fundamental differentiators of right wing vs. left wing economics. One side of the debate (the left) believes that the Government should regulate labour markets to ensure that the most vulnerable workers in our society are protected against greedy employers, and this will lead to a long term more equitable society. The other side of the debate (the right) believes the best path is to trust the power of the market to set labour rates, the argument is that the hardest workers will naturally attract the highest pay rates and encourage the labour force as a whole to be more productive. At a more practical level, the debate in Australia is concentrated on what to do about Sunday penalty rates which are paid at double time in some industries and whether to reduce those rates to be the same as Saturday rates. There are many institutional, practical and political factors at play which we will try to summarise in this article. Arguments for reducing Sunday penalty rates The argument goes that a reduction in cost of employment on Sundays will simultaneously lift productivity and improve unemployment rates in Australia. Many businesses remain closed on Sunday, because opening is unprofitable. Advocates of the rate cut argue that although some employees would see less money in their take-home pay packet, the overall result will be lower unemployment; not only because more business will trade on Sunday, but because many businesses will choose to increase their service levels (by employing more people) when margins aren’t quite so slim. Arguments against reducing Sunday penalty rates This side of the debate worries that reducing penalty rates will be hurting those in society who need the money the most and should be rewarded at higher rates due to working more ‘unsociable’ hours. Those against penalty rate cuts are generally very sceptical that business owners will create more jobs through the pay rate cuts, and see the proposed cut as a transfer of money from employee’s back-pockets into business owners’ wallets. What about the politics? Not too long ago, specific pay rates for industries were regulated at a State, rather than a Federal level. The move to shift powers of overall rate-setting to the confines of Canberra means that this debate is now being played out on the national stage. The problem for Turnbull and the Coalition is their track-record on labour market reform. As soon as the debate shifts to penalty rates, Turnbull runs the risk of resurfacing some of the toxic politics from the WorkChoices legislation. The problem for the Labour party and particularly Shorten, is how much this fight relies on support from the Union movement. As the political mudslinging begins, this could prove to be particularly bad timing for Shorten following the damning finding of the Royal Commission into Unions. All of this is mixed in with an unpredictable cross-bench, who Turnbull will need to win the support of to push through any change. There is far more at play for both sides than the practical changes to paychecks on Sunday. For both sides this argument flares deeply held ideological principles and is seen as a skirmish on the much larger war on our nation’s attitude towards labour laws, the free-market and the role of government. Get ready for the s**tfight.   At Tanda, our Award Interpretation software helps businesses ensure they are paying their staff correct penalty rates at different times throughout the week.

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About the author

Katrina Marquez

Customer Success: With a background in industrial relations, Katrina brings a wealth of knowledge to our Tanda team.

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