How will the penalty rates cut impact your business?

As the dust settles surrounding the controversial move by the Fair Work Commission to cut penalty rates, staff and businesses continue to grapple with the implications of the decision.

Employers and employees alike have been left scratching their heads following the decision to cut penalty rates for workers in the Hospitality, Retail, Fast Food and Pharmaceutical Industries. The decision is one of the most polarising in years and is expected to have an unprecedented impact on the bottom line of both full time and casual staff.

So, what does this mean for a business owner?

The Fair Work Commission is the independent governing body responsible for administering judicial decisions regarding workplace relations and industrial law. They are also legislatively authorised to review award rates every four years under the Fair Work Act.

The Fair Work Commission is obliged to ensure the current wage remains fair and appropriate. It is this, which led to the most recent review where both Sunday and Public Holiday Penalty Rates were cut. The decision, which comes into effect on July 1, 2017, may affect you and your business in the following ways:

Penalty Rates

The Retail Award where Sunday rates will be reduced from:

  • 200% down to 150% for full-time and part-time employees
  • 200% down to 175% for casuals

The Pharmacy Award where Sunday rates will be reduced for work between 7am and 9pm from:

  • 200% down to 150% for full-time and part-time employees
  • 200% down to 175% for casuals

The Hospitality Award where Sunday penalty rates will be reduced for full-time and part-time employees (but not for casuals) from 175% to 150%

The Fast Food Award where Sunday penalty rates for Level 1 employees will be reduced from:

  • 150% down to 125% for full-time and part-time employees
  • 175% down to 150% for casuals

Public Holiday Rates

The Hospitality Award, Retail Award, Fast Food Award and Pharmacy Award where public holiday penalty rates will be reduced from:

  • 250% down to 225% for full-time and part-time employees
  • 275% down to 250% for casuals

The Restaurant Award where public holiday penalty rates will be reduced from:

  • 250% to 225% for full-time and part-time employees.

There may well be transitional provisions and instructions on implementation of these changes – we will have to wait and see.

Want to discuss how this decision could impact your business? At NB Lawyers, the lawyers for employers, we provide a consultation to discuss how we can assist you with any concerns you may have.

Written by
Jonathan Mamaril, Principal & Director
NB Lawyers – the Lawyers for Employers
jonathanm@nb-lawyers.com.au
07 3876 5111