NEWS ALERT – Changes to Penalty Rates

NEWS ALERT – Changes to Penalty Rates

As part of the four yearly review of modern awards, the Fair Work Commission has announced yesterday that Sunday, public holiday and early/late night penalty rates will be reduced for some permanent and casual employees in the retail, fast food, hospitality and pharmacy industries. This is obviously a huge benefit for employers who will be able to cut wage payments to employees but a harsh reality for employees.

The Commission said that although Sunday work is considered to have a higher level of “disutility” than Saturday work, it is much less than in past years and whilst the Commission is not expecting a large increase in jobs from the changes, there is evidence it will lead to an increase in trading hours, the level and range of services offered on Sundays and public holidays and an increase in hours worked.

Overview of the changes

The below table summarises the awards and type of employees affected by the changes.

Award Sunday Penalty Rates Public Holiday Penalty Rates Early/Late Night Penalty Rates

 

General Retail Industry Award 2010 Permanent employees drop from 200% to 150%

Casual employees drop from 200% to 175%

Permanent employees drop from 250% to 225%

Casual employees drop from 275% to 250%

 

No change
Restaurant Industry Award 2010 No change at present Permanent employees drop from 250% to 225%

No change for casuals

Change of span of hours attracting a 15% penalty rate from midnight to 7.00am to midnight to 6.00am.

 

Pharmacy Industry Award 2010 Permanent employees working between 7.00am and 9.00pm drop from 200% to 150%

Casual employees working between 7.00am and 9.00pm drop from 200% to 175%

 

Permanent employees drop from 250% to 225%

 

Casual employees drop from 275% to 250%

No change

 

Fast Food Industry Award 2010 Permanent level 1 employees drop from 150% to 125%

Casual level 1 employees drop from 175% to 150%

Permanent employees drop from 250% to 225%

Casual employees drop from 275% to 250%

 

Change of span of hours attracting a 10% penalty rate from 9.00pm to midnight to 10.00pm to midnight.
Hospitality Industry (General) Award 2010 Permanent employees drop from 175% to 150%

No change for casuals

Permanent employees drop from 250% to 225%

Casual employees drop from 275% to 250%

No change

Start date for changes

Public holiday penalty cuts will come into effect on 1 July 2017 and early/late night work loadings in the restaurant and fast food awards will take effect in late March.

The Commission is yet to decide when Sunday rate cuts will come into effect, but have indicated it will phase in the changes over at least two annual instalments which will occur around the time of any increase in minimum wages on 1 July of each year.

What employers need to do

Before changes come into effect, it is important for employers to review and update their current employment contracts to include reference to relevant changes in awards (if necessary). If an employment contract contains reference to a previous award penalty rate (i.e. 200% on Sunday), that employee may still be entitled to be paid in accordance with previous penalty rates. If you are unsure whether the changes affect your business, contact the team at HR Law today.

HR Law will keep you updated on any further significant changes to the modern awards.

No Comments

Post A Comment