BREAKING NEWS: FWC PENALTY RATES DECISION
An average 15% fall in Sunday rates has been approved by the Fair Work Commission – inducing jubilation from employer groups and fury from worker representatives.
Cuts, cuts, cuts
The Fair Work Commission announced cuts to Sunday penalty rates as follows:
- retail industry from 200% to 150% (for permanent staff) and 175% (for casuals);
- hospitality industry from 175% to 150% (for permanent staff only);
- fast food industry from 150% to 125% (for permanent staff) and 175% to 150% (for casual staff)
- pharmacy from 200% to 150% (permanent staff) and from 200% to 175% for casual staff.
Excluding the fall in public holiday penalty rates from 250% to 225% across the hospitality, retail fast food and pharmacy industries, this calculates out as an average 15% cut to penalty rates.
According to the Commission more than 450 submissions and witness statements were filed on this case, which is part of the four-yearly review of modern awards.
'Extraordinarily significant' decision
Luis Izzo, director, workplace relations, at Australian Business Lawyers & Advisors, commented:
“This decision is extraordinarily significant. Firstly, it brings a large reduction in Sunday penalty rates which employer parties said were stifling employment. Secondly, it shows the FWC is willing to re-assess historical norms that we have had for considerable periods of time. It certainly could have an impact on other awards. Hair and beauty has been mentioned and, for instance, restaurants and licensed clubs which didn’t succeed but may well have another opportunity at a later date.
"The next review was scheduled, at this stage, for 1 January this year. But Parliament may put an end to the review process and then there would be more a more staggered approach. Employers should be happy; they have been worried about the weight on employment of penalty rates and this will lift that weight considerably.”
Industry and worker reaction – from delight to dismay
Industry reaction came fast and hard. Employer groups are delighted. Worker representatives are dismayed.
The NSW Business Chamber declared the decision was the start of workplace reform. CEO Stephen Cartwright said: “On the whole what we wanted to see in key services sectors was achieved… The Commission accepted large parts of the employer argument about the role of Sunday in our modern society and the need to increase employment opportunities on Sunday and public holidays. So the umpire has clearly spoken.”
The Australian Industry Group welcomed the decision, saying the re-set of penalty rates in the fast food industry better aligns those rates with the characteristics and needs of 21st century workplaces. It also declared the decision as a victory for common sense.
However the decision to cut rates was condemned by worker groups.
The Council of Australian Postgraduate Associations declared that it was “dumbfounded” at the decision.
“This cut comes at a time when wages in Australia are already stagnant and is another blow to students who are already under financial siege,” it said.
Meanwhile, the Australian Council of Trade Unions called upon the Prime Minister to protect workers from drastic penalty rate and public holiday pay cuts.
“The Fair Work Commission’s decision to radically cut Sunday and public holiday pay will give almost one million Australian workers a huge pay cut. The Australian Council of Trade Unions calls on the Turnbull government and all political parties to immediately act to protect working people from any cuts to their take home pay, as the cuts are due to come into effect on 1 July, 2017,” ACTU president Ged Kearney said.
“This is a loss of up to $6,000 per year for some workers. No worker will be better off as a result of this decision. This is a cut Australian workers cannot afford and do not deserve. The decision also comes a day after record low wage growth was reported for the second consecutive quarter. Australians deserve a pay rise, not a pay cut,” she said.
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