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Penalty Rates For Sundays, Public Holidays To Be Slashed

Workers could lose up to $6000 a year.

23/02/2017 11:03 AM AEDT | Updated 23/02/2017 6:44 PM AEDT

The Fair Work Commission has cut Sunday and public holiday penalty rates, meaning "millions" of workers in the retail, hospitality and fast-food industries will take home up to $6000 less per year.

After a lengthy process of consultations and submissions since 2015, the commission decided to cut penalty rates for working on Sundays and public holidays. Employer and business groups had argued that Sunday penalty rates of double time pay should be trimmed back to the Saturday rate of time-and-a-half or at least time-and-three-quarters.

On Thursday morning, the FWC handed down its decision in Melbourne, announcing that Sunday rates and public holiday rates would be cut across the different industries:

  • Public holiday penalty rate for full-time and part-time employees will be reduced from 250 to 225 percent. The rate for casuals will be 250 percent;
  • In the hospitality award, penalty rates for full-time and part-time employees will be reduced from 175 to 150 percent. There will be no change to the Sunday rate for casuals which will remain at 175 percent;
  • In the fast food award, the Sunday penalty rate will be reduced for level one employees from 150 to 125 percent for full-time and part-time employees and from 175 to 150 percent for casuals. There will be no change to Sunday penalty rates for level two and three employees in that award;
  • In the retail award, the Sunday penalty rate for full-time and part-time employees will be reduced from 200 to 150 percent. The Sunday rate for casuals will be reduced from 200 to 175 percent;
  • In the pharmacy award, the rate for full-time and part-time employees for work between 7:00am and 9:00pm will be reduced from 200 to 150 percent. The Sunday rate for casuals will be reduced from 200 to 175 percent.

"For many workers, Sunday work has a higher level of disutility than Saturday work. Though the extent of the disutility is much less than in times past," the Fair Work Commission said in handing down its judgment.

The FWC noted that cutting penalty rates would affect those on low incomes, and said that "transitional arrangements" were needed, but said the commission hasn't decided on what those should be.

"Many of these employees earn just enough to cover weekly living expenses. Saving money is difficult and unexpected expenses produce considerable financial distress. The immediate implementation of the variations to Sunday penalty rates would inevitably cause some hardship to the employees affected, particularly those who work on Sundays," the FWC said.

"We have concluded that appropriate transitional arrangements are necessary to mitigate the hardship caused to employees who work on Sundays. We have not reached a concluded view as to the form of those arrangements. We will seek submissions from interested parties about that issue."

The fact that more and more Australians are required to work weekends and irregular hours so we can all have the convenience of access to hospitality, retail and services, makes it more important to protect penalty rates, not less.Chris Bowen

President of the Australian Council of Trade Unions, Ged Kearney, said the decision could cut pay for workers by up to $6000 a year, calling it a "complete furphy" that cutting penalty rates would boost employment.

"Unless there is severe intervention, we are on the way to seeing a whole class of working poor in this country," Kearney said immediately after the decision.

"People whose pay is going to be cut will simply have to work more hours to make up that take-home pay. You can't survive on a 20 percent pay cut. It will put more pressure on the labour market. It will simply mean people whose pay have been cut will have to work more hours, work longer shifts."

The ACTU immediately called on the Prime Minister to legislate to protect penalty rates.

"Unless he acts now, Prime Minister Malcolm Turnbull will be forever remembered as the prime minister who oversaw the cutting of the take home pay of almost one million of Australia's lowest paid workers," Kearney said in a press release after speaking.

"Retail, fast food, pharmacy and hospitality workers work extraordinary hours and deserve to be compensated for working on weekends and late nights when the vast majority of the Australian workforce does not."

Greens MP Adam Bandt said his party would soon move legislation to protect penalty rates in the federal parliament.

"This decision to cut penalty rates in the retail and hospitality industry will only embolden lobbyists who will now have the penalty rates of people working in other industries in their sights," Bandt said in a release.

"The Greens will move to protect the weekend and public holidays by stopping today's cuts from coming into effect and protecting penalty rates in law from future cuts."

The Productivity Commission had recommended the changes to align Saturday and Sunday rates in 2015, while Turnbull has argued "history" was the only reason the weekend rates differed. The PM and business groups claim lowering penalty rates would help ease unemployment, saying Sunday rates discourage businesses from opening on the weekends and from employing more staff. Unions had fiercely opposed the changes, however, saying many families depend on the extra income from penalty rates to pay bills.

"With wages growth at record lows and underemployment at record highs, there could not be a worse time to cut penalty rates," Labor leader Bill Shorten said on Wednesday.

"Millions of Australian families rely on penalty rates to put food on the table -- Labor will fight for these people and their penalty rates."

In a blog for The Huffington Post Australia, shadow treasurer Chris Bowen argued strongly against Turnbull's position that we now live in a seven-day-a-week economy.

"Until the Cabinet, Parliament and company boards all routinely meet on Sundays, we do not have a seven-day-a-week economy. Until then, some people have to work on Sundays while the rest of us get to enjoy them. Secondly, the fact that more and more Australians are required to work weekends and irregular hours so we can all have the convenience of access to hospitality, retail and services, makes it more important to protect penalty rates, not less."


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