Demonstrations and workers' anger did nothing to foil the penalty rate reduction. Demonstrations and workers' anger did nothing to foil the penalty rate reduction.
Money Work The Australian workers about to be slugged with a pay cut Updated:

The Australian workers about to be slugged with a pay cut

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If you turn out flat whites in a cafe, or serve burgers in a fast-food drive through of a Sunday, you’ll be getting a pay cut from next week.

And if you do that every Sunday, you’ll be about $436 and $545 a year out of pocket, respectively.

For someone working in retail on a Sunday, things are even worse, with a pay cut of almost $860 a year.

And that’s before you take reduced superannuation contributions into account.

The pay cuts come courtesy of the latest round of penalty rate reductions coming into force on Monday, July 1 – the third phase of cuts imposed by the Fair Work Commission in 2017 – affecting retail, hospitality, pharmacy and fast-food employees who work on Sundays.

According to Jim Stanford, chief economist with the Centre for Future Work, about 540,000 workers in the four sectors are affected by the cuts.

Dr Stanford estimated the overall cost to workers (based on the second phase of cuts implemented in July 2018) was $8 million lost on a typical Sunday.

However, Unions NSW believes the changes affect up to 700,000 workers (across any given year), who faced an overall cut to their income of up to $6000 a year.

Hospitality Award

The Hospitality Industry Award essentially covers hotels, bars and casinos. It also covers restaurants contained within hotels, bars and casinos, but not standalone restaurants or cafes.

On July 1, the penalty rate for working on a Sunday will fall from 160 per cent to 150 per cent.

That means the minimum wage on a Sunday will go from $30.29 an hour to $29.24.

Pharmacy Award

The Pharmacy Industry Award covers, logically, people employed in pharmacies.

On July 1, the penalty rate of 180 per cent of Monday-to-Friday hourly wage falls to 165 per cent for full- and part-time employees. For casual staff, the Sunday rate goes from 205 per cent of the Monday-to-Friday hourly wage to 190 per cent.

That means the minimum wage on a Sunday will fall from $37.52 to $35.33 per hour.

The Sunday penalty rate is scheduled to fall again in July 2020 to 150 per cent.

Fast Food Award

On July 1, fast food industry Sunday penalty rates will fall from 135 per cent to 125 per cent for full- and part-time employees, and from 160 per cent to 150 per cent for casuals.

That means the minimum wage on Sunday will fall from $28.07 to $26.76.

Retail Award

Full- and part-time retail workers will see their Sunday penalty rates fall from 180 per cent to 165 per cent on July 1, and from 185 per cent to 175 per cent for casual staff.

That means the Sunday minimum wage will fall from $37.42 an hour to $35.33 an hour.

The Sunday penalty rates will fall for full- and part-time retail workers again in July 2020 from 165 per cent to 150 per cent.

Note, the rates quoted here are the minimums only, and rates will vary greatly depending on position and pay scale.

If you want to check how you will be affected, consult the Fair Work Ombudsman’s site, which lists the rates under each award.

Penalty cuts are ‘economic madness’

Unions NSW secretary Mark Morey slammed the cuts, saying they were fair recompense for workers who missed out on key leisure and family time and came at a time when Australia’s sluggish wage growth needed every support possible.

“Australia is also in the midst of a wages crisis. From the Reserve Bank governor down, every serious economist knows that breathing life into wages is our most pressing economic priority,” Mr Morey said.

“So cutting the penalty rates of modestly paid retail and hospitality workers is economic madness.”

Australian Retailers’ Association executive director Russell Zimmerman said the changes to the retail Sunday rate would affect only those on the national award, which he estimated to be 300,000 to 400,000 employees.

Most of the sector, including large retailers such as Coles, Woolworths and Super Retail Group, is covered by separate enterprise bargaining agreements (EBA) and so is not affected by the changes.

He noted that some of the Sunday penalty cuts would also be offset by the 3 per cent increase to the minimum wage, which would flow through to the 2.2 million employees in Australia on industry awards.

Mr Zimmerman also argued that Australia had “the highest or second-highest” retail wages worldwide, and that penalty rate cuts were another measure to keep retail competitive.

“Retail is no longer a local or Australian business,” he said.

“It’s global. We are competing against retailers from the US or the UK and everywhere in the world.

“If we are to remain competitive – and many retailers’ biggest days are Saturdays and Sundays – then we have to consider overheads.”