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WHAT I NEED TO KNOW ABOUT Penalty Rate Changes

IN FEBRUARY 2017, THE FAIR WORK COMMISSION MADE A DECISION REGARDING CHANGES TO PENALTY RATES.
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WHAT I NEED TO KNOW ABOUT Penalty Rate Changes

WHAT I NEED TO KNOW ABOUT Penalty Rate Changes

30 March 2017

IN FEBRUARFAST FOODY 2017, THE FAIR WORK COMMISSION MADE A DECISION REGARDING CHANGES TO PENALTY RATES.

HOW WILL IT IMPACT MY BUSINESS?


The decision means that there will be changes to penalty rates for employers who engage employees
under the terms of any of the following modern awards:


• Hospitality Award
• Pharmacy Award • Fast Food Award
• Restaurant Award • Retail Award

SO WHAT ARE THE ACTUAL CHANGES? SUNDAY PUBLIC HOLIDAYS RETAIL

• Permanent staff: 200% to 150%
• Casual staff: 200% to 175%
• Permanent: 250% to 225%
• Casuals: 275% to 250%

HOSPITALITY

• Permanent staff: 175% to 150% • Permanent: 250% to 225%
• Casuals: 275% to 250%

• Permanent Level 1 staff only: 150% to 125%
• Casual Level 1 staff: 175% to 150%
• Permanent: 250% to 225%
• Casuals: 275% to 250%

PHARMACY

• Permanent staff 7am-9pm only: 200% to 150%
• Casual staff 7pm-9pm only: 200% to 175%
• No change to early/late night loadings
• Permanent: 250% to 225%
• Casuals: 275% to 250%

RESTAURANTS

• No cut to Sunday rates, as the FWC found employers failed to make their case, but some variation to early/late night work rates.
• Permanent: 250% to 225%

CLUBS

• No cut to public holiday rate for permanent staff and no changes to weekend penalty rates (the FWC has expressed support for this award being subsumed into the Hospitality award).

WHAT CHANGES WOULD I HAVE TO MAKE?

If you engage employees under the terms of these modern awards, you will need to adjust their pay rates for their Sunday and public holiday hours.

THESE ARE THE CHANGES YOU WILL TO CONSIDER:

• Determine which employees will be affected by the changes (those who are employed under the terms of the Modern Award).
• Distribute a formal letter or communication
informing relevant staff of the impending
changes that will be made to their pay.
• Adjust payment systems to reflect changes in
standard pay rates.

HOW WAS WORKPLACE ASSURED INVOLVED?

Workplace Assured’s employment relations legal team Australian Business Lawyers & Advisors stood before the Commission. Australian Business Lawyers & Advisors are an award-winning legal named Workplace Relations & Employment Team of the Year”, awarded by Lawyers Weekly and finalists for Employment Law Specialist Firm of the Year. On behalf of Workplace Assured, Australian Business Lawyers & Advisors, (ABLA) presented evidence to the Fair Work Commission as part of the four-yearly review of modern awards.

This role included submitting expert academic evidence and survey outcomes, presenting cases for public holidays and Sunday penalties, and conducting extensive cross-examination of expert and lay union
witnesses.

WHEN WILL THE CHANGES BE MADE?

• Early/late night loadings in restaurant and fast food awards: late March 2017.
• Public Holidays: 1 July 2017.
• Sunday Rates: to be determined. Drafts of the transitional arrangements are expected to be
 released shortly.

WHY DID THE COMMISSION MAKE THE DECISION?

Despite increasing demands from the community for business to operate on Sundays and public holidays, the cost pressures applied by penalty rates has prevented many small business owners from opening their doors – impacting both their customers and their employees. The decision demonstrates that current penalty rates in the sectors affected do not reflect the demands on modern businesses.

HOW DID THE COMMISSION DECIDE THIS?

The Commission’s 550-page decision followed two years of rigorous assessment, 140 witnesses, and more than 28,000 paragraphs of transcript.

DOES THIS DECISION LINE THE POCKETS OF BIG BUSINESS?

No. The Commission recognised that the industry sectors subject to these awards have some of the lowest business survival rates, including retail and hospitality. Small businesses in these sectors are operating with limited margins in a highly competitive work environment. With the average taxable income of individuals earning income from a business estimated at $53,268.06 in 2013-14, some small business owners earn less than the staff they employ!

WHAT ABOUT EMPLOYEES ON INDUSTRIAL AGREEMENTS

Employees on enterprise agreements will not be affected by these changes. It should be noted that
many workers are already being paid lower penalty rates, as they are subject to enterprise agreements directly negotiated between some of the big chains and their unions. Small business owners are not
easily able to negotiate directly with the unions. Consequently, in some particular industries (eg.
pharmacy), select businesses pay $63 an hour per employee in order to open their business on a Sunday.
Workplace Assured is brought to you by the following state chambers. Workplace Assured customers are advised and represented by award winning Australian Business Lawyers & Advisors.

HAVE A CURLY HR QUESTION?

Speak to one of our award winning workplace relations experts for free by calling the Employer Free Advice line on 1300 496 955 or visit help.workplaceassured.com.au.

WHAT IF I HAVE QUESTIONS?

Speak to one of our award winning workplace relations experts for free by calling the Employer Free Advice line on 1300 496 955 or visit help.workplaceassured.com.au.

COMMON MISTAKES:

When it comes to penalty rates, some employers may accidentally get it wrong and land up paying hefty fines for their innocent mistakes. Some common errors include:
1. Thinking that penalty rates do not apply because staff are paid a ‘flat’ above-Award rate.
2. Failing to update pay rates to the current minimum rates (which increase each year).
3. Being unaware of the existence of penalty rates (e.g. early morning/late night penalties may apply).
4. Being unaware that penalty rates may apply to part-timers who work outside their roster hours.

HOW CAN I CALCULATE THE IMPACT TO MY BUSINESS?

If you’d like to run through the numbers or get a better understanding of what the penalty rate changes mean for your business, obtain expert workplace relations advice at no charge by calling our *Free Employer Advice Line on 1300 496 955.
* One free call per caller

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