Background

In recent years, various employer bodies have made applications to the Fair Work Commission to vary the penalty rates provisions in a number of modern awards in the hospitality and retail sectors, including:

• Hospitality Industry (General) Award 2010
• Registered and Licensed Clubs Award 2010
• Restaurant Industry Award 2010
• Fast Food Industry Award 2010
• General Retail Industry Award 2010
• Hair and Beauty Industry Award 2010
• Pharmacy Industry Award 2010

In late 2015, the Productivity Commission made a recommendation that the Sunday penalty rates be lowered to the Saturday rate, creating a single “weekend” rate in certain sectors. The Productivity Commission contended that a reduction in Sunday rates would increase work opportunities for those who are available to work on Sunday as more businesses remain open on this day.

Today, the Full Bench of the Fair Work Commission handed down the highly anticipated decision, ruling that Sunday penalty rates for hospitality and retail workers in these sectors will be reduced. The FWC has had the difficult task of balancing the interests of the unemployed versus the employed, as well as business operators and employers.

The decision

The decision as announced this morning is as follows: Sunday pay rates for full and part time hospitality workers will be cut from 175% of their wage to 150%. In the retail sector, Sunday rates will be reduced for full and part time workers from 200% to 150% of the standard rate. Saturday penalties remain unchanged. The Commission declared that the reduction in penalty rates will allow for increased trading hours and an increase in overall hours worked. As well, changes proposed to Sunday and public holiday rates will result in greater consistency in the hospital and retail industry awards. The FWC acknowledges that these changes will “inevitably award hardship to those affected, particularly those who work on Sundays”, and it will seek to assist these parties through transitional arrangements to mitigate any hardship. The Commission is seeking submissions on how best to implement these arrangements.

The changes to be introduced

The following tables outline the relevant industry which is undergoing change, and the reduction in rates for employees of those industries.

Sundays

Public holidays 

The changes to public holiday rates will take effect from 1 July 2017.