A Full Bench of the Fair Work Commission made a significant ruling this morning in which it reduced Sunday and public holiday penalty rates in five modern awards.
A Full Bench of the Fair Work Commission (Commission) made a significant ruling this morning in which it reduced Sunday and public holiday penalty rates in five modern awards.
What you need to know
- Sunday and public holiday penalty rates will be reduced in five modern awards across the retail, hospitality, restaurant, fast food and pharmacy sectors.
- From 1 July 2017, the reduction to public holiday rates will take effect.
- The Commission is proposing to seek submissions from interested parties regarding arrangements to transition in the reduction in Sunday penalty rates.
Background
The ruling was a part of the Commission's ongoing four yearly review of modern awards during which the Commission is tasked with determining whether each modern award achieves the modern awards objective. If a particular modern award does not, then the Commission can vary the modern award.
At the commencement of the review process, interested parties were invited to make applications to vary modern awards. Various employer bodies made applications to vary the penalty rates provisions in a number of modern awards in the hospitality and retail sectors.
The modern awards that are the subject of the ruling are the Hospitality Industry (General) Award 2010 (Hospitality Award), the Fast Food Industry Award 2010 (Fast Food Award), the General Retail Industry Award 2010 (Retail Award), the Pharmacy Industry Award 2010 (Pharmacy Award) and the Restaurant Industry Award 2010 (Restaurant Award).
What are the reductions?
The reductions vary between the modern awards and do not necessarily apply to all employees.
The changes to the affected awards (where applicable) include reductions between the range of 25% and 50% in respect of Sunday penalty rates and reductions of 25% in respect of public holiday rates.
In addition to the above reductions, the Full Bench has varied some of the penalty provisions relating to early/late night work in the Restaurant Award and Fast Food Award.
Final Notes
- Be aware that the reductions in penalty rates do not take effect immediately. The changes to public holiday rates and penalty provisions relating to early/late night work in the Restaurant Award and Fast Food Award do not take effect until 1 July 2017 and there is no specific date set for the Sunday penalty rates changes which are likely to be phased in.
- More information regarding the reduction in penalty rates is likely to be released over the coming weeks.
- Employers should be aware that they will not necessarily be able to categorically reduce the applicable penalty rates for current employees when they come into effect – particularly where any current employees are subject to employment contracts which provide that they are entitled to receive the old penalty rates.
- If any affected employers have a particular view or preference regarding the phasing in of the reductions in Sunday penalty rates, they should consider making application (directly or via their relevant industry group) when the Commission calls for submissions from interested parties regarding arrangements to transition in the reduction in Sunday penalty rates.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.