Penalty Rates: The finer details...
The Fair Work Commission has recently published the 4 yearly review of modern awards for 2017. This review sees significant changes to the penalty rates for full-time, part-time and casual employees in the following industries:
- Fast Food Industry Award 2010 (the Fast Food Award)
- General Retail Industry Award 2010 (the Retail Award)
- Hospitality Industry (General) Award 2010 (the Hospitality Award)
- Pharmacy Industry Award 2010 (the Pharmacy Award)
- Registered and Licensed Clubs Award 2010 (the Clubs Award)
- Restaurant Industry Award 2010 (the Restaurant Award)
The most significant change to the above awards is with respect to Sunday penalty rates, Public Holiday penalty rates and early/late night work loading.
It was noted within the review that the rationale behind penalty rates was two-fold. Firstly, the need to compensate employees for working outside of normal hours (the compensatory element) and secondly, to deter employers from scheduling work outside of standard hours (the deterrence element). The Full Bench concluded, after considering the terms of the modern awards' objective and also the scheme of the Fair Work Act, that the deterrence element is no longer a relevant consideration.
Consequently, the Full Bench reduced Sunday penalty rates to ensure consistency across the retail and hospitality industries. Proposed changes to the Sunday Penalty rates in the Hospitality and Retail Awards can be found below.
|Award Title||Previous Penalty Rate (%)||Proposed Penalty Rate (%)|
As can be seen in the table below, Public Holiday rates are now more consistent across various industries:
|Public Holiday Penalty Rates (%) changes current to proposed|
|Award Title||Full-time and Part-time||Casual|
|Hospitality||250 to 225||275 to 250|
|Restaurant||250 to 225||250|
|Retail||250 to 225||275 to 250|
|Fast Food||250 to 225||275 to 250|
|Pharmacy||250 to 225||275 to 250|
The Full Bench has not reached a conclusive decision regarding what form of transitional arrangements should be implemented.
However, the reduction in penalty rates will take effect on 1 July 2017.
Changes to early/late night loading in relation to Restaurant and Fast Food Awards will take effect in late March 2017.
However, it is important to note that these changes may not apply uniformly across all retail and hospitality businesses. The Full Bench noted that in some instances shopping centres may not open on Sundays or there may be insufficient consumer demand to justify opening the store for Sunday trading. Consequently, there would be no change in the penalty rates awarded in such circumstances.
It is also important to note that if an enterprise agreement is currently in place, then it is also unlikely that the changes to penalty rates will have any impact on the terms of employment for those employees covered by that agreement.
If you are unsure of your obligations under the proposed changes, please do not hesitate to contact the Clifford Gouldson Workplace Team.