Fair Work locks in Sunday penalty rate cuts

The commission announced its decision in February to cut penalty rates for retail, hospitality, pharmacy and fast-food workers but it was only yesterday it announced its transition plan.

The Fair Work Commission today announced that only small cuts will be made to rates starting from next month.

Holiday rates will be cut to 225% for full-time and part-time workers, and 250% for casual workers, effective from 1 July.

Commerce Ballarat chair David Wright said the most recent announcement by the commission to increase wages "negated" the net benefit to businesses by cutting penalty rates.

Cuts to penalty rates in the Retail Award will be phased in over four years, however retail lobbyists are unhappy about the decision.

The first cut will be five percentage points, with more significant cuts in 2018, 2019 for fast food and hospitality workers.

Australian Retailers Association (ARA) executive director Russell Zimmerman said retailers expected to be able to "ramp up" employment as a result of the change to lower penalty rates on Sundays, but would be hindered by the prospect that further reviews would be undertaken at the request of unions such as the Shop, Distributive and Allied Employees Association (SDA).

"The solution is simple - these cuts can be stopped if Malcolm Turnbull supports Labor's legislation to do so", he said.

The FWC acknowledged the sudden nature of these cuts, with less than a month before they start to take place. He called on the Turnbull government to support his private members' bill to stop the cuts.

The Full Bench also said there was a need for transitional arrangements to mitigate hardship, and that these were within the power of the commission.

Former Labor minister and ACTU leader Martin Ferguson, now chairman of industry group Tourism Accommodation Australia, said he realised that reforming penalty rates was a tough decision "but ultimately this was essential".

Moreover, the Australian Hotels Association said the certainty from the FWC's judgement will help hotels make long-term decisions.

The Greens' Adam Bandt said the decision was "devastating news" for low-paid workers: "With profits up a massive 40 per cent this year but wages only 0.9 per cent, it beggars belief that business says it can't afford to pay penalty rates".

  • Zachary Reyes