After a review spanning some 2 years, 39 days of hearing and 5,900 submissions by all stakeholders, the Full Bench of the Fair Work Commission has delivered a decision that sees a reduction in Sunday penalty rates in 4 awards and a reduction in public holiday penalty rates in 5 awards.

Sunday Penalty Rates

The reduction in Sunday penalty rates is summarised as follows:

Hospitality Industry (General) Award 2010

Full-time and part-time employees     –           reduction from 175% to 150%

Casual employees                              –           no change

 Fast Food Industry Award 2010 (changes only apply to Level 1 employees)

Full-time and part-time employees     –           reduction from 150% to 125%

Casual employees                              –           reduction from 175% to 150%

General Retail Industry Award 2010

Full-time and part-time employees     –           reduction from 200% to 150%

Casual employees                              –           reduction from 200% to 175%

Pharmacy Industry Award 2010 (for hours worked 7.00am to 9.00pm only)

Full-time and part-time employees     –           reduction from 200% to 150%

Casual employees                              –           reduction from 200% to 175%

Interestingly, there was no reduction in penalty rates under the Restaurant Industry Award 2010 or the Registered and Licensed Clubs Award 2010, with the Full Bench commenting that the stakeholders in those industries “did not establish a merit case sufficient to warrant the granting of their claims.”

The Full Bench did not close the matter for employers under the Restaurant Industry Award, asking for further submissions in support of their case by 24 March 2017.  It has also suggested to employers under the Registered and Licensed Clubs Award 2010, that an option could be to revoke the Registered and Licensed Clubs Award 2010 and extend the coverage of the Hospitality Industry (General) Award 2010 to cover those ‘club’ employers.  It asked for submissions on this issue, and also further submissions on the merits of reducing penalty rates under the Registered and Licensed Clubs Award 2010.

The Full Bench has indicated, provisionally and subject to submissions on the issue, that it will phase in adjustments to Sunday penalty rates through increases on 1 July each year.  It contemplated that at least 2 instalments would be appropriate, but that 5 instalments would be too many.  However, at this stage the commencement of the new penalty rates has not been confirmed.

Public Holiday Penalty Rates

The Full Bench also ordered reductions in public holiday penalty rates in 5 awards, summarised as follows:

Hospitality Industry (General) Award 2010

Full-time and part-time employees     –           reduction from 250% to 225%

Casual employees                              –           reduction from 275% to 250%

Fast Food Industry Award 2010

Full-time and part-time employees     –           reduction from 250% to 225%

Casual employees                              –           reduction from 275% to 250%

General Retail Industry Award 2010

Full-time and part-time employees     –           reduction from 250% to 225%

Casual employees                              –           reduction from 275% to 250%

Pharmacy Industry Award 2010

Full-time and part-time employees     –           reduction from 250% to 225%

Casual employees                              –           reduction from 275% to 250%

Restaurant Industry Award 2010

Full-time and part-time employees     –           reduction from 250% to 225%

Casual employees                              –           no change

The public holiday penalty rates are to be implemented from 1 July 2017.

Other changes

For employers covered by the Fast Food Industry Award 2010, the Full Bench has also determined to change the application of the evening work shift loading from applying between 9pm and midnight Monday to Friday to between 10pm and midnight.

The Full Bench also determined to change the application of the late-night shift loading in the Restaurant Industry Award 2010 from applying between midnight and 7am Monday to Friday, to midnight to 6am Monday to Friday.  The Full Bench also indicated that they would align the Fast Food Industry Award 2010 with the Restaurant Industry Award 2010 in this respect.

Action

Where your business has employees covered by any of the awards referred to above, and who will be affected by these changes in the awards, we strongly recommend that you review their employment contracts once the final terms of the changes are confirmed.  We can assist you with reviewing your employment contracts to ensure compliance.

From the time the changes commence operation, you will need to ensure the relevant employees are paid in accordance with the amended penalty provisions and shift loadings.  The public holiday penalty rate changes commence form 1 July 2017.  The dates for the commencement of the other changes is yet to be confirmed.

Further information

Aitken Legal will endeavour to keep employers informed as to any other significant matters arising out of this decision, and will also confirm the date for commencement of the changes to weekend penalty rates and shift loadings, once this is confirmed.

If you have any questions about how these changes might impact your business, or you would like us to review your employment contracts to ensure compliance, please do not hesitate to contact us.

If you would like to read the full decision (551 pages), it can be found here:

https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/2017fwcfb1001.pdf

Summary of the decision (15 pages) can be found here:

https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/2017fwcfb1001-summary.pdf