Sunday Penalty Rates Reduction – Transition Confirmed

June 5, 2017
Sunday Penalty Rates Reduction – Transition Confirmed

Industry Focus

Retail

The Full Bench of the Fair Work Commission (Commission) today issued its decision setting out the transitional arrangements that will apply to the reductions in Sunday and Public Holiday penalty rates announced on 23 February 2017.  The Commission determined that Sunday penalty rates will be reduced via a four (4) stage transition for permanent staff, and a three (3) stage transition for casual staff in the Retail industry.  The Commission has also confirmed that Take Home Pay Orders are not available to employees impacted by the reductions, and that there will be no “red-circling” or “grandfathering” of existing employees.

The table below sets out the way the Sunday penalty rate reduction will transition:

 

General Retail Industry Award 2010

 

CategoryPrevious1 July 20171 July 20181 July 20191 July 2020
Permanent Sunday200%195%180%165%150%
Casual Sunday 200%195%185%175%-

 

Hospitality Industry Award 2010

 

CategoryPrevious1 July 20171 July 20181 July 2019
Permanent Sunday175%170%160%150%

 

Pharmacy Industry Award 2010

 

CategoryPrevious1 July 20171 July 20181 July 20191 July 2020
Permanent Sunday200%195%180%165%150%
Casual Sunday 225%220%205%190%175%

 

Fast Food Industry Award 2010

 

CategoryPrevious1 July 20171 July 20181 July 2019
Permanent Sunday (Level 1)150%145%135%125%
Casual Sunday (Level 1)175%170%160%150%

 

The Commission also confirmed that the reductions in public holiday penalty rates will commence in full from 1 July 2017.   Those reductions are:

 

AwardPermanent penalty Casual penalty old/new
General Retail Industry Award 2010250 225275 250
Hospitality Industry Award 2010250 225275 250
Pharmacy Industry Award 2010250 225275 250
Fast Food Industry Award 2010250 225275 250
Restaurant Industry Award 2010250 225250 (no change)

 

Background

FCB acted on behalf of the Australian Retailers Association (ARA) and the retail industry in the penalty rates case. After achieving the historic win for retailers, FCB then sought a speedy introduction of the reduced penalty rate in order to maximise the employment benefits.  FCB asked the FWC to implement a two-stage transition, with the Sunday penalty rates reduction for permanent and casual employees be reduced to 175% from 1 July 2017, and for permanent employees a further reduction to 150% from 1 July 2018.  FCB also sought the immediate implementation of the public holiday penalty reductions.

The Shop, Distributive and Allied Employees Association (SDA) called for a two year delay before any implementation followed by a six-stage transitional process.

 

What next?

This decision confirms that the reduction in Sunday penalty rates will commence as of 1 July this year.  The SDA have already flagged that they will seek a stay of the decision pending judicial review by the Federal Court.  The FWC has given parties 7 days to comment on the Draft Determinations giving effect to the transitional arrangements, following which they will be finalised.  Once the Determinations are finalised the SDA will apply for judicial review, and will also make the stay application.