Penalty rate cuts. What now?

The Government is urging employers to be cautious when rolling out cuts to penalty rates as per the the Fair Work Commission’s decision for retail, hospitality and pharmacy workers announced on February 23, 2017.

The Government is urging employers to be cautious when rolling out cuts to penalty rates as per the the Fair Work Commission’s decision for retail, hospitality and pharmacy workers announced on February 23, 2017.

 

The Sydney Morning Herald reported that the Fair Work Commission draft decision, which came after almost two years, 39 days of hearings, statements from nearly 145 witnesses and reading through 5900 submissions, will see Sunday penalty rates for full and part-time retail workers cut from double time, to time and a half while Sunday rates for casual retail workers will fall from 200 per cent to 175 per cent.

 

In hospitality full and part-time workers will also see a cut, from 175 per cent to 150 per cent, although casuals will see no change. Fast food full and part-time workers will see rates drop from 175 per cent to 150 per cent.

 

As yet there has not been a decision as to how this will be implemented and Prime Minister Malcolm Turnbull is asking for the transition to be carried out “in a way that ensures that take-home pay is as far as possible maintained”.

 

He has also announced that the government will make a submission on technical issues to the Fair Work Commission and Liberal Senator (and former workplace minister) Eric Abetz is asking for existing workers pay rates to be protected and that these new rates to only apply to new employees.

 

However, Australian Industry Group chief Innes Willox says it would be too difficult for employers to have different employees on different terms and conditions.

 

A report by the McKell Institute says that less workers will seek part or full time work, instead opting for casual employment, leading to lower employment and job security for both employers and workers, however former Prime Minister Tony Abbott has told The Australian:  “The issue is not higher wages versus lower wages. It’s about making it possible for more businesses to stay open because if the business is shut no one gets paid anything.”

 

The Australian has also reported that retailers such as Woolworths, Myers, Coles, Bunnings, Kmart and Target have previously entered into enterprise bargain agreements with the retail union — the Shop, Distributive and Allied Employees’ Association - and that this decision will allow smaller retailers and businesses to pay their staff at a similar rate to these big corporates.

At this stage it is understood that these changes will take effect on July 1, however there are still issues to be resolved so business owners need to stay on top of the changes as they are further discussed.