Fair Work Commission Penalty Rate Reductions – 23 February 2017

By James Sanders, Associate, MST Lawyers

Throughout 2015 and 2016, the Full Bench of the Fair Work Commission (‘FBFWC‘) has taken submissions, and heard evidence, over a total of 39 hearing days, regarding the variation of weekend and public holiday penalty rates, for six modern awards, in the hospitality and retail sectors.

Today, the FBFWC decided to vary Sunday, Public Holiday, and Late Night penalty rates in some of these awards.

The new penalty rates are summarised in the table below.

Award	Sunday Penalty Rates		Public Holiday Penalty Rates
	Current	Proposed	Current	Proposed
Hospitality Award Permanent employees: Casual employees:	175% 175%	150% No change	250% 275%	225% 250%
Fast Food Award Permanent employees: Casual employees:	Level 1 Only 150% 175%	Level 1 Only 125% 150%	All Employees 250% 275%	All Employees 225% 250%
Retail Award Permanent employees: Casual employees:	200% 200%	150% 175%	250% 275%/250%	225% 250%
Pharmacy Award   Permanent employees: Casual employees:	(7:00 am – 9:00 pm only) 200% 200%	(7:00 am – 9:00pm only) 150% 175%	(7:00 am – 9:00 pm only) 250% 275%	(7:00 am – 9:00 pm only) 225% 250%
Restaurant Award Permanent employees: Casual employees:	150% 150%* or 175%**	No change No change	250% 250%	225% No change
Licensed Clubs Award	No changes were made

*Introductory Level, Level 1 & Level 2       **Level 3 to Level 6

In addition to the above changes, the Fast Food Award and Restaurant Award will have the hours during which Early/Late Night penalties are paid to be between 10:00pm and midnight, and midnight and 6:00 am.

 Introduction of the changes

The FBFWC has outlined that the proposed changes will take effect as follows:

• Sunday Penalty Rates: It is proposed that these rates will be transitioned over a series of annual adjustments on 1 July each year (commencing 1 July 2017) to coincide with any increase in modern award minimum wages. Submissions are being accepted on this point, and a decision should be made in early May 2017

• Public Holiday Penalty Rates: 1 July 2017 with no transitional provisions

• Early/Late Night Penalties: late March 2017

Loaded/Flat Rates of pay

The FBFWC also noted that the Fair Work Ombudsman has uncovered a large amount of non-compliance in the Hospitality and Retail Awards, where employers are paying a loaded (or flat) rate of pay.

The FBFWC flagged the idea of introducing flat rates into these modern awards to increase award compliance.  It is expected that this process will commence after a decision has been made in relation to the transitional arrangement for the reduction in Sunday penalty rates.

For more information, please contact our Employment Law and Workplace Safety team by email or by telephone Ph: +61 3 8540 0200.