Recent changes to penalty rates

Posted on Mar 19, 2017 by Cassandra Nix   |   Categories: Employment Law

On 23 February 2017, the Fair Work Commission made a landmark decision ruling to vary Sunday and public holiday penalty rates. The ruling directs a reduction of penalty rates for permanent and casual employees paid under awards for retail, fast food, hospitality and pharmacy industries.

These reductions include reducing the Sunday penalty rates from double time (200% of standard pay rate) to time-and-a-half (150%), in line with Saturday penalty rates.

The following summarises how the main groups of workers are affected:

 

IndustryPenalty rateFull & part time employeesCasual employees
RetailSunday200% to 150%200% to 175%
Public holiday250% to 225%250% – no change
Fast foodSundayLevel 1 -150% to 125%

Level 2-3 – 150% – no change

175% – 150%
Public holiday250% to 225%250% – no change
HospitalitySunday175% to 150%175% – no change
Public holiday250% to 225%250% – no change
PharmacySunday200% to 150%200% to 175%
Public holiday250% to 225%250% – no change

 

The changes apply to those employed under the following Awards:

  • General Retail Industry Award 2010;
  • Fast Food Industry Award 2010;
  • Restaurant Industry Award 2010;
  • Pharmacy Industry Award 2010; and
  • Hospitality Industry (General) Award 2010.

 

No changes have yet been made to Sunday penalty rates for those working in clubs and restaurants under the Registered and Licensed Clubs Award 2010. This industry previously saw Sunday rates cut for casuals from 175 per cent to 150 per cent in 2014.

The public holiday penalty cuts will come into effect from 1 July 2017. The timing for the Sunday penalty rate cuts to come into effect is unclear. The Fair Work Commission has advised that transitional arrangements will occur to lessen the hardship on employees.