Sunday Penalty Rate Changes From July 2017 – What You Need To Know

17th Jul 2017

penalty rate changes

On February 23 of this year, the Fair Work Commission handed down a decision that is estimated to impact close to a million workers across the country. Sunday penalty rates for retail, fast-food, hospitality and pharmacy workers have been cut, with the first set of changes recently enacted on July 1. We have listed the essential details of the changes for employers and employees in these four major industries.

Who Will Be Impacted by the Changes?

The details of the rate cuts differ across awards, with contracted and casual staff experiencing different reductions. The table below details the reductions, expressed as a percentage of the normal hourly pay rate that workers receive.

Fast Food Hospitality Retail Pharmacy
Full/Part Time Workers 125%, reduced from 150% 150%, reduced from 175% 150%, reduced from 200% 150%, reduced from 200%
Casual Workers 150%, reduced from 175% No changes made 175%, reduced from 200% 175%, reduced from 200%

In some cases, the rate cuts will be slowly brought in over several years. Fast food and hospitality workers will experience a five per cent reduction this year, followed by 10 per cent cuts in both 2018 and 2019. In the case of full and part time retail and pharmacy workers, there will be a five per cent decrease in pay this year, followed by fifteen per cent cuts yearly until 2020. The Fair Work Commission has chosen to stagger the delivery of these cuts in an effort to allow workers to prepare for the financial hardships that will result.

For those who are unsure if the changes pertain to their working situation, the Australian Government Fair Work website provides an interactive tool that you can use.

The Point of View of Those in Favour of Penalty Rate Cuts

There have been several arguments in favour of the implementation of rate cuts. Many hospitality venues have stated that Sunday penalty rates place significant financial stress on their business, and their hours of operation and staffing levels on Sunday are reduced as a result. As such, these newly enacted changes could result in a better experience for consumers and a wider range of hospitality and entertainment venues being opened on a Sunday.

Opposition to the Sweeping Changes

The penalty rate cuts were met with widespread condemnation among sections of the community. Those opposed to the changes suggest that directly taking money from those who rely on Sunday penalty rates will negatively impact the economy, as income cuts result in decreases in spending. They argue that penalty rates are fair compensation for the social disadvantages of working on a Sunday, and there is no guarantee that all employers will pass on the purported benefits of these cuts by employing more workers or increasing their opening hours on Sundays.

Who Was in Favour and Who Opposed the Changes?

In broad terms, the Sunday penalty rate cuts were advocated by small businesses. The Australian Retailers Association praised the changes, stating that they would result in less pressure on businesses, more businesses opening on Sundays and more jobs created by extension. Several businesses, however, have refused to pass on the rate cuts and will continue paying penalty rates at previously agreed percentages. The Productivity Commission also recommended changes to Sunday penalty rates in 2015, advocating for simpler weekend pay rates to be introduced across relevant industries.

Unsurprisingly, there has been significant discontent from workers who rely on Sunday penalty rates to make ends meet. The Australian Council of Trade Unions has also voiced their opposition to the cuts, stating that they are to the considerable financial detriment of workers in some of Australia’s lowest paid industries.

Contact Us for Advice or Representation

For advice regarding the application of these changes as a business owner or employee, or for any representation pertaining to business law, don’t hesitate to get in contact today.

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