..Sunday penalty rate slashed…

…Unions will target federal MP’s…

…Employers under attack over decision to cut wages…

…New rates hurt women workers

…these are just a small sample of the headlines over the past fortnight discussing the decision by the Full Bench of the Fair Work Commission to alter Sunday and Public holiday penalty rates.

After more than two years of proceedings, 39 hearing days, 143 witnesses and 5900 submissions, the commission decided that the existing Sunday and Public Holiday penalty rates in some industries are no longer fair or relevant for employers in the current economic times, nor do they align with our future economic and consumer needs and as such need to be adjusted.

The focus of the decision was a recognition that work on the weekends and public holidays should come with a loading to acknowledge the impact on family and social time.  What was concluded in the decision however, was that the Saturday loading was deemed reasonable but the Sunday loading was too high in comparison to Saturday.  Public Holiday loading was also seen to be disproportionately high.

The changes to the Sunday and Public holiday penalty rates only impact specific Awards.  It will not affect all workers, it will also not impact those employees under Enterprise Agreements.  It was determined by the commission that the economic and employment benefits for these awards could not be automatically apply to all industries and any further Award changes would be decided on an Award by Award basis.

Employees with ‘above award’ arrangements written into their employment contract or terms of their employment will only be affected where the contract is silent or states something to the contrary.

There are still decisions to be made by the Commission about how the new reduced rates will be introduced and whether there will be a tiered approach to the reductions to (a) ease the impact on workers and (b) allow employers to commence the process of opening for longer or by employing more staff.

In regards to the impact of wages reductions on staff by the decision, the commission was very evidence based and focused only on penalty rates and the loading associated with them, not on whether the underpinning wage rate for these employees was fair or not.

The adjustment to Sunday penalty rates will be phased in over at least two annual increments and not until after 1st July 2017.

Only the Awards listed below are impacted, this is not an across the board decision, it will only affect those businesses covered by the Modern Awards listed.

As employers there a few things you can do to get prepared for the changes to the Sunday and Public Holiday rates.

  • Check your current employment conditions, even if you pay your staff an over the Award wage, your employment contract, workplace agreements, even your policies may contradict this and not allow you to apply an automatic reduction of rates
  • Check your rosters and determine which staff will potentially be affected and what the impact on their wage may be, talk to them about this sooner rather than later
  • Look at your current staff numbers and opening times on Public Holidays and Sundays. Consider what a reduction in Sunday and Public Holiday loadings might mean to your wages bill or opening times or the numbers of staff you currently roster on, or look to increasing your service offering.

The other consideration for your business is to remember that there will likely be a minimum award rate increase on 1 July, the exact % amount determined in May or early June. This will somewhat offset the impact of the penalty rate reduction to your employees.

The Hair and Beauty industry was seen as another industry that possibly would be next in line for a penalty rate reduction, other industries would need to produce sufficient evidence on the future economic benefit prior to be considered by the commission.

Proposed Sunday and public holiday penalty rates in the affected Awards:

Award Title Sunday Rates (%) Public Holiday Rates (%)
Permanent staff (full time and part time) Casual staff (includes casual loading) Permanent staff (full time and part time) Casual staff (includes casual loading)
Fast Food Award (Level 1 only) Was 150 175 250 275
Now 125 150 225 250
Hospitality Award Was 175 175 250 275
Now 150 175 225 250
Pharmacy Award* Was 200 225 250 275
Now 150 175 225 250
Restaurant Award Was 150 150 250 250
Now 150 150 225 250
Retail Award Was 200 200 250 275/250
Now 150 175 225 250

* Pharmacy Award Sunday rates changed only between 7am and 9pm.

Any questions about the impact of these rates on your business and your staff, please contact your engagement contact or speak with Wendy Jeffery-Lonnie our HR Manager on 08 9327 1739.