Finance Work Fair Work Commission cuts Sunday penalty rates

Fair Work Commission cuts Sunday penalty rates

Workers will earn more overall on July 1, but are likely to suffer cuts in 2018 and 2019. Photo: Getty
Twitter Facebook Reddit Pinterest Email

The Fair Work Commission has sided with employers, ruling to cut penalty rates for some industries operating on Sundays.

Workers in the hospitality, retail and fast food sectors can expect a reduction in Sunday penalty rates.

Public holiday rates will also be cut for full-time employees from 250 per cent to 225 per cent.

The changes would come into effect in July.

The Fair Work Commission on Thursday agreed with the Productivity Commission’s argument that there are likely to be some “positive” employment effects from a reduction in penalty rates.

Fair Work Commission president Iain Ross said Sunday penalty rates would still be higher than for Saturdays.

“Generally speaking, for many workers, Sunday work has a higher level of disutility than Saturday work,” he said.

“Though the extent of the disutility is much less than in times past.”

Mr Ross said the commission took evidence from business owners that Sunday penalty rates had led employers to restrict trading hours and reduce staff levels.

“The evidence also supports the proposition that a reduction in penalty rates is likely to lead to increased trading hours, an increase in the level and range of services offered on Sundays and public holidays and an increase in overall hours worked,” he said.

Mr Ross said the changes would provide greater consistency to penalty rate settings in the hospitality and retail awards.

Hospitality workers will see their Sunday rates drop from 175 per cent to 150 per cent, while fast food workers will drop from 150 per cent to 125 per cent.

Retail workers face a cut from 200 per cent to 150 per cent for Sunday work.


Mr Ross also acknowledged the changes would cause hardship to some workers.

“Many of these employees earned just enough to cover weekly living expenses,” he said.

The results translate into a cut of $22.50 for a counter worker at McDonalds on a six hour Sunday shift which will be now pay $112.50 compared to $135 before the decision.

A retail worker could expect to lose $72 on a Sunday 7.5 hour shift cutting earnings to will now earn $216. For waiting staff in a cafe the loss would be around $23 on a six hour shift that will bring in $139 after the changes

A ‘bad day’ for workers

Australian Council of Trade Unions (ACTU) president Ged Kearney said it was a “bad day” for workers across Australia.

“Jobs in hospitality have doubled with the current penalty rates in place. Penalty rates are not an impediment to creating jobs,” Ms Kearney told The New Daily.

“The choices that leaves workers are to get another job, get a second job or leave the industry altogether and get a better paying job,” she said.

“What the economy needs right now is a wage rise and what this is doing is cutting salaries. 

Posted by Save our Weekend on Wednesday, 22 February 2017

“There’s a lot of time between now and July when Malcolm Turnbull could intervene. What we need is parallel legislation to protect workers’ take-home pay.”

Secretary of Victorian Trades Hall Council Luke Hilakari called it “the greatest cut to working people’s wages since the Great Depression”.

“There will be families sitting around the table tonight saying ‘what are we going to do?'” Mr Hilakari said.

“This will disproportionately affect women more than men, as women tend to be in more insecure work and are highly represented in areas like retail and hospitality.

It’s going to be a rough day for many people who will be saying ‘we just got robbed’.”

Opposition Leader Bill Shorten said the decision was a “disaster” for the economy and blamed the penalty cuts on the Turnbull government.

“Millions of Australians have counted on Malcolm Turnbull to stand up for their pay and conditions. He doesn’t get it. He is out of touch,” Mr Shorten said.

“Labor was the only political party who submitted a case against the cutting of penalty rates.  

“This is a weak and unfair decision … It seeks to reduce the pay of hundreds of thousands of the most low paid Australians already … it hurts enterprise bargaining and productivity … (and) it hurts confidence in the Australian economy.

“Why should an employer think about giving workers pay rises when the Fair Work Commission can be allowed just to reduce peoples’ payand conditions?”

Minister for Employment Michaelia Cash, in turn, blamed Bill Shorten for the changes.

“This [penalty rate cut] was as a direct result of Bill Shorten, when he was the relevant minister in government, amending the Fair Work Act to look at penalty rates in the context of modern awards, Ms Cash said.

“As a result of that, the commission has … received thousands upon thousands of submissions from interested parties, arguing the case either form a reduction in penalty rates or, alternatively, for no reduction in penalty rates.

“There is no-one who is out there saying that a penalty rate should not be paid on a Sunday. And, again, anybody who stands up today and says that is blatantly misleading the Australian people.”

Retailers welcome changes

The Australian Retailers Association (ARA), alongside the Master Grocers Association, Franchise Council of Australia and many national retailers, has been working toward a reduction in Sunday penalty rates. 

ARA executive director Russell Zimmerman said Thursday’s decision would increase retail growth nationally and reduce Australia’s unemployment rate.

“With retailers currently paying employees double time on Sundays, many retailers are forced to close their doors on this day, impeding on growth in the retail sector,” Mr Zimmerman said.

“Reducing Sunday rates from double time to time-and-a-half will give employers approximately a four to five per cent reduction on wages, which they will be able to reinvest in employing more staff, increasing employment in the retail industry.” 

Mr Zimmerman said the reduction would increase the employment of young people who were seeking weekend work.

Peter Strong, CEO of the Council of Small Business Australia said  this is a good result. it means that small business will no longer have to pay double time to staff on Sundays while big businesses like Coles, Woolworths and McDonalds who have enterprise agreements in place only pay 1.5 times earnings”.

“It will allow small businesses to open on Sundays, or make a profit not a loss when they do. It also means owners might be able to afford to get a day off,” Mr Strong said.

Plans to block cuts

Adam Bandt, The Greens’, said his party would join Labor and the cross bench to block the cuts in parliament.

Australian Greens industrial relations spokesman Adam Bandt has vowed to introduce legislation to prevent penalty rates from taking effect.

“This is a body blow to the hundreds of thousands of people who depend on penalty rates to make ends meet,” Mr Bandt said.

penalty rates petition
A petition opposed to the penalty rates cut reached 3000 signatures in its first hour

“If you work shifts on Sunday or public holidays to help pay the rent or support you through your study, this cut will hurt.

“Coffees won’t get any cheaper on Sunday but young people will find it harder to pay the rent.” 

The penalty rates decision has prompted an ACTU sponsored petition to protect weekend workers’ pay.

The petition attracted more than 3400 signatures within an hour of being posted.

View Comments