Reduced Penalty Rates Here to Stay

October 11, 2017
Reduced Penalty Rates Here to Stay

penalty rate decision

A five member Full Court of the Federal Court this morning issued its decision in relation to the application by the Shop, Distributive and Allied Employees Association (SDA) and United Voice for judicial review of the Fair Work Commission’s Penalty Rates Decision.  The Full Court unanimously determined that the Commission had not erred in the manner in which it conducted its assessment of the appropriate Sunday and public holiday penalty rates in the retail and other services sector awards.  As such the unions’ application was dismissed.

FCB has acted for the retail industry in the Penalty Rates Case since planning began in 2012, culminating in the successful application to reduce Sunday and public holiday penalty rates.  The unions, in their application for judicial review, asserted that the Commission had committed the following jurisdictional errors:

  • the Commission failed to establish that there had been a material change in circumstances since the making of the relevant awards which would warrant a reconsideration of the appropriate penalty rates;
  • the Commission considered “relevant” (in the context of a “fair and relevant minimum safety net”) as meaning that a modern award should be suited to contemporary circumstances, and this resulted in the Commission misapplying the modern awards objective;
  • the Commission failed to properly consider (or in some aspects consider at all) the needs of the low paid in reducing the Sunday penalty rate. Key to this was an assertion that the Commission effectively abrogated its responsibility to consider this factor when it said that the needs of the low paid were best addressed by the setting and adjustment of modern award minimum wages.

The Full Court unanimously rejected each of alleged errors, and held that the Commission had properly disposed of its statutory obligations.

For any questions, please contact Nick Tindley on (03) 9098 9400 or