Sunday penalty rates cut for retail, hospitality, pharmacy and fast food workers
Recently, the Fair Work Commission made changes to the Sunday penalty rates for workers in the hospitality, fast food, pharmacy and retail industries. Traditionally, Sunday penalty rates have been higher than Saturday penalty rates. The Sunday penalty rates cut has been extremely controversial – on one side being heralded for job growth potential, and on the other being condemned for cuts to the pay-packets of already low-paid workers.
The changes were made to the relevant awards. An ‘award’ is a piece of legislation that sets out the minimum conditions that employers must comply with when employing workers in a particular industries. Awards supplement other legislative requirements, such as those outlined in the Fair Work Act. If an employer wants to make alternative arrangements with staff, they can enter into an enterprise agreement if workers are ‘better off overall.’ Individual contracts are often used for professional workers, but these agreements must also be more beneficial to the employee than the conditions of the relevant award.
What are the changes?
It was expected that Sunday rates would be reduced to fall in line with Saturday penalty rates. This would have accorded with the recommendations made by the Productivity Commission in November 2015. However, this was not the case for the majority of the awards amended. “Except in fast food awards, we have not reduced the Sunday rates to the same rate as Saturday,” said Iain Ross, President of the Fair Work Commission. “Sunday work has a higher level of disutility, but much less than in times past.”
The following changes were made to the awards:
Retail
Previous rate for all workers: 200% of regular hourly rate
New rate for full and part time workers: 150% of regular hourly rate
New rate for casual workers: 175% of regular hourly rate
Hospitality
Previous rate for full and part time workers: 175% of regular hourly rate
New rate for full and part time workers: 150% of regular hourly rate
No changes for casuals
Fast food
Previous rate for full and part time ‘Level 1’ employees: 150% of regular hourly rate
New rate for full and part time ‘Level 1’ employees: 125% of regular hourly rate
Previous rate for casual ‘Level 1’ employees: 175% of regular hourly rate
New rate for casual ‘Level 1’ employees: 150% of regular hourly rate
Pharmacy
Changes were only made for work performed between 7:00am and 9:00pm. Work outside these outs will incur pre-existing penalty rates.
Previous rate for all workers: 200% of regular hourly rate
New rate for full and part time employees: 175% of regular hourly rate
New rate for casual employees: 175% of regular hourly rate
How does this decision apply to your business?
If you employ workers under any of these awards, you can lower their Sunday rate to the amount specified in the award. Some businesses have decided to continue paying workers at the previous rate of Sunday pay. Businesses are free to negotiate rates with their workers so long as they are meeting or exceeding award minimums.
You will need to seek legal advice if you wish to alter an enterprise agreement that you have entered into with your workers. Agreements between employers and employees to vary the terms of an enterprise agreement must be approved by the Fair Work Commission.
Want to ensure that your arrangements or contracts comply with employment laws? Please don’t hesitate to contact our experienced Newcastle commercial lawyers at Butlers Business and Law on (02) 4929 7002 or fill out an enquiry form on our website.
