FWC rules to cut Sunday and Public Holiday Penalty Rates

FWC rules to cut Sunday and Public Holiday Penalty Rates

In a landmark decision handed down this week, the FWC has ruled to cut Sunday and Public Holiday penalty rates, which will impact over 1 million Australian’s. The decision comes after the Hospitality and retail sectors made applications to vary penalty rate provisions as part of the Fair Work Commission’s four-yearly review of awards. However, the announcement has been greeted with mixed reviews, with some business groups arguing that businesses will benefit from the changes though:

  • Increased trading hours and services offered on Sundays and Public Holidays.
  • Potential for businesses to generate more revenue.
  • Increased shifts for workers and overall hours worked.
  • Allowing businesses to hire more staff.

Nonetheless, the decision has been widely criticised by unions and affected parties, with the president of the ACTU stating that many workers will not be able to survive on the considerable pay cut. A summary of the changes are outlined below.

The FWC rejected the argument sought by businesses that Sunday rates should be reduced to the Saturday rate.

Furthermore, as many of those affected will be Australia’s low paid workers, the FWC recommends that appropriate transitional arrangements are to be implemented to soften the blow caused to those who work on Sundays. However, the commission has not reached a conclusive view on the form of the arrangements and are seeking submissions from interested parties.

The proposed changes to Public Holiday Penalty rates are expected to take affect from 1 July 2017. As for Sunday penalty rates, the FWC has proposed for the reductions to take place in a series of annual adjustments — between 2 and 5 — from 1 July 2017 to coincide with increases in modern award minimum wages arising from Annual Wage Review decisions .

What does it mean for employers?

  • Employers will need to keep paying their employees under their current arrangements until the changes are expected to take effect.
  • If your employee’s are covered by an Enterprise Bargaining Agreement (EBA), the decision will be of no effect. This is because the modern award will not apply and the agreement will specify the terms and conditions of employment, which includes rates of pay.
  • Could this be the end for Sunday and Public Holiday Surcharges? Probably not. Even if the penalty rates were cut, they would still not meet the costs of staffing arrangements.
  • The FWC has ruled to cut Sunday and Public Holiday penalty rates, which will impact Australian workers in the retail, hospitality and fast food industries.  
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