Sunday, holiday penalty rates to be cut

Sunday, public holiday penalty rates paid to retail, hospitality, fast-food workers will be cut following historic ruling

Sunday and public holiday penalty rates paid to retail, hospitality and fast-food workers will be cut following a historic ruling by the Fair Work Commission.

Commission president Iain Ross announced the Sunday rates would be reduced but not to the lesser Saturday rate sought by business.

• Full-time and part-time hospitality workers will have their Sunday penalty rate cut from 175 per cent to 150 per cent.
• Full-time and part-time retail workers will have their Sunday penalty rate cut from 200 to 150 per cent.
• Full-time and part-time fast food workers will have their rate cut from 150 per cent to 125 per cent.
• Public holiday rate in retail, hospitality, and fast food will be cut.

• The full 551-page ruling can be downloaded here
• More Penalty Rates reaction here

The cuts to public holiday rates will start from July but the commission will take further submissions and the timing of the Sunday rate cuts.

Turnbull and his MPs have been pushing to cut penalty rates for years - and now it's happened. #auspol

— Bill Shorten (@billshortenmp) February 23, 2017

Make no mistake Malcolm Turnbull and his Liberals have always wanted this cut to penalty rates. Labor will keep up the fight #auspol

— Brendan O'Connor (@BOConnorMP) February 23, 2017

Union reaction

ACTU Ged Kearney said the pay cuts would hurt one million employees and create a class of working poor.

She called on the Turnbull Government to take action to protect workers.

Ms Kearney said the decision to radically cut Sunday and public holiday pay would give almost one million Australian workers a huge pay cut.

“Hospitality, restaurant, fast food, retail and pharmacy workers will have their Sunday penalty rates cut between 25% and 50%,’’ she said.

“Public holiday pay was also slashed by up to 25%. This is a loss of up to $6,000 per year for some workers. No worker will be better off as a result of this decision.

She called on the Government and the ALP to take action to protect take-home pay.

“This decision is a game changer for industrial relations in Australia,’’ she said.

“The independent umpire makes decisions based on the rules they are given. These rules are contained in our laws. We need the rules to change so penalty rates cannot be cut and our parliament must act now to protect working people.”

“Unless he acts now, Prime Minister Malcolm Turnbull will be forever remembered as the prime minister who oversaw the cutting of the take home pay of almost one million of Australia’s lowest paid workers.”

Former ACTU president Martin Ferguson called on unions to respect the decision.

Mr Ferguson, chair of the Tourism Accommodation Australia, said industry “haven’t got everything we want” from the decision.

“We respect their decision and we will try and make it work,’’ he said.

“For us, the objective was to modernise the award, not to abolish penalty rates, but to make it relevant to the 21st century as a means of employing more Australians.”

‘Shorten’s inconvenient truth’

Employment Minister Michaelia Cash sought to sheet home responsibility for today’s decision to Bill Shorten.

“It is an inconvenient truth for the Labor Party that in 2013 Bill Shorten as Workplace Relations Minister amended the Fair Work Act to specifically require the Fair Work Commission to review penalty rates as part of the four yearly review process,’’ she said..

“Today’s decision by the Commission to adjust penalty rates is therefore a direct result of the review process put in place by Bill Shorten.

“Any suggestion by Bill Shorten and the Labor Party that they do not accept this decision is highly hypocritical.

“Bill Shorten needs to explain why he instigated a wideranging review of penalty rates if does not support a change in penalty rates.”

She said the Turnbull Government’s position had been “consistent and clear — the setting of penalty rates are a matter for the independent Fair Work Commission to determine, not Government”.

‘Commission has been mugged’

Former Employment Minister and Liberal MP Eric Abetz said the commission had been “mugged” by the reality that its previous rejection of employer attempts to cut penalties cost jobs and investment in the hospitality, retail and tourism sectors.

He noted that the tribunal agreed with the Productivity Commission’s findings that decreasing penalty rates will increase employment.”

“This is a decision that came after 3 years of deliberations from the Fair Work Commission established by Labor, by appointments by Labor — including Bill Shorten’s hand-picked President and made possible by legislation passed by Bill Shorten himself. Particularly given these facts, Mr Shorten, Labor and the union movement must accept this decision.”

Australian Industry Group chief executive said the commission had recognised that existing Sunday rates were not fair on employers

In the decision, Justice Ross said workers who gave evidence to the hearings put a human face on the economic data and the individual impact of the cuts.

“Many of these employees earn just enough to cover weekly living expenses, saving money is difficult and unexpected expenses produce considerable financial distress,’’ he said.

“The immediate implementation of the variations to Sunday penalty rates would inevitably cause some hardship to the employees affected, particularly those who work on Sundays.

“The Full Bench concluded that appropriate transitional arrangements are necessary to mitigate the hardship caused to employees who work on Sundays.”

He said a substantial proportion of the employees were low paid and the reductions in Sunday penalty rates was likely to reduce their earnings.

He said most existing employees would probably face reduced earnings “as it is improbable that, as a group, existing workers’ hours on Sundays would rise sufficiently to offset the income effects of penalty rate reductions”.