Full Bench Fair Work Decision Handed Down on Penalty Rates
Friday 24 February 2017 @ 2.14 p.m. | Industrial Law
Yesterday (23 February 2017), the Fair Work Commission Full Bench handed down a momentous decision in the 4 yearly review of modern awards – Penalty Rates [2017] FWCFB 1001. The Fair Work Commission decided to cut Sunday and some public holiday rates of pay across the hospitality, retail, pharmacy and fast food industries for full time, part time and some casual workers.
The Fair Work Decision
Section 156 of the Fair Work Act 2009 (Cth) (the FW Act) provides that the Fair Work Commission (the Commission) must conduct a review of all modern awards every four years (the Review). As part of the Review, various employer bodies made applications to vary penalty rate provisions in a number of modern awards. These applications were heard together.
In particular, the following modern awards were reviewed in the decision:
- Fast Food Industry Award 2010;
- General Retail Industry Award 2010;
- Hospitality Industry (General) Award 2010;
- Pharmacy Industry Award 2010;
- Registered and Licensed Clubs Award 2010; and
- Restaurant Industry Award 2010.
The 2084 paragraph decision, going over 551 pages, looked at weekend work, the retail sector, the hospitality sector and penalty rates in detail, including the industries which the major awards covered above generally service.
The final decision will see the reduction of Sunday penalty rates in the retail industry from 200 per cent to 150 per cent for permanent staff and 175 per cent for casuals. It will also reduce Sunday penalty rates in the hospitality industry from 175 per cent to 150 per cent for permanent staff only; reduce Sunday penalty rates in the fast food industry from 150 per cent to 125 per cent for permanent staff and 175 per cent to 150 per cent for casual staff; and reduce public holiday penalty rates from 250 per cent to 225 per cent across the hospitality, retail fast food and pharmacy industries.
Reaction to the Decision
The Australian Council of Trade Unions (ACTU) said the decision to reduce the rates would affect nearly 1 million workers, costing some up to A$6,000 per year.
Opposition Leader Bill Shorten said Labor would fight the cuts “in parliament and in the courts”. It would use another hearing to try to stop them being implemented and if that failed a future Labor government would change the rules under which the Fair Work Commission operated:
“There will be another set of hearings to look at how this disastrous, kick in the guts is implemented … we are going to do our best to convince the Fair Work Commission not to implement this decision...If we are unsuccessful, we will also be changing the law in parliament to change the rules that the Fair Work Commission operate under.”
The Australian Chamber of Commerce and Industry said:
“The changes to penalty rates awarded by the commission will give thousands of small and family-run businesses more capacity and new incentives to hire staff, give more hours to existing staff and increase services”.
The final Commission decision also included indications for transitional arrangements to minimise hardship on those affected by the penalty rate changes, however the Commission indicated that the Sunday Penalty rates changes should come into effect within a year.
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