Fair Work Commission Penalty Rates Update

Fair Work Commission Penalty Rates Decision

General
On the 23rd of February, the Fair Work Commission (FWC) handed down its decision in the much publicised “Penalty Rates Case”. It has decided to reduce certain penalty rates within the hospitality and retail industries. Many of the changes cited by the FWC are proposed changes, and are yet to be finalised, with regard to amounts, dates, and possible transitional arrangements over time. Changes that may affect your workplace may depend upon the following factors:
• Days of the week worked
• Time of the day worked
• Classification level, and/or
• Employment status (permanent or casual).

Companies with Certified Agreements (also known as EBA’s), lodged with the FWC, are unlikely to be affected by these changes.
These changes are confined to specific Modern Awards within the Hospitality and Retail industries.

Hospitality
Modern Awards affected:
• Hospitality Industry (General) Award 2010 (MA000009)
• Registered and Licensed Clubs Award 2010 (MA000058), and
• Restaurant Industry Award 2010 (MA000119).

Retail
Modern Awards affected:
• Fast Food Industry Award 2010 (MA000003)
• General Retail Industry Award 2010 (MA000004), and the
• Pharmacy Industry Award 2010 (MA000012).

Further Modern Awards within the Hospitality, Retail and Entertainment industries may be affected in future decisions, but these will be subject to a lengthy review and hearing process.
The FWC was guided, largely, by the Productivity Commission Report, and, as such, does not see the need to review or reduce penalty rates in other industries at present (or in the near future).

Proposed Changes

• Early/Late Night Work Penalties
Currently, under the Restaurant Industry Award 2010, there is a 15% loading for work performed between midnight and 7am. It is proposed that this will be changed to work performed between midnight and 6am.
Presently, the Fast Food Industry Award 2010, has a 10% loading for work carried out between 9pm and midnight. The change proposed is that this will be changed to work performed between 10pm and midnight.

• Weekend Work Penalties
Saturday work, across all of the affected Modern Awards, will remain unchanged at present.
Sunday work is proposed to be changed as follows:

Modern Award Sunday Penalty Rate Changes Proposal

1. Hospitality Industry (General) Award 2010
Full-time and Part-time Employees 175% down to 150%
Casual Employees No change

2. Fast Food Industry Award 2010
Level 1 Employees Only
Full-time and Part-time Employees 150% down to 125%
Casual Employees 175% down to 150%

3. General Retail Industry Award 2010
Full-time and Part-time Employees 200% down to 150%
Casual Employees 200% down to 175%

4. Pharmacy Industry Award 2010
7am to 9pm only
Full-time and Part-time Employees 200% down to 150%
Casual Employees 200% down to 175%

Modern Award Public Holiday Penalty Rate Changes Proposal

1. Hospitality Industry (General) Award 2010
Full-time and Part-time Employees 250% down to 225%
Casual Employees 275% down to 250%

2. Restaurant Industry Award 2010
Full-time and Part-time Employees 250% down to 225%
Casual Employees No change

3. Registered and Licensed Clubs Award 2010
Full-time and Part-time Employees No change
Casual Employees No change

4. General Retail Industry Award 2010
Full-time and Part-time Employees 250% down to 225%
Casual Employees 275% (or 250%) down to 250%

5. Fast Food Industry Award 2010
Full-time and Part-time Employees 250% down to 225%
Casual Employees 275% down to 250%

6. Pharmacy Industry Award 2010
Full-time and Part-time Employees 250% down to 225%
Casual Employees 275% down to 250%

TIMING OF THE PROPOSED CHANGES

The FWC has proposed that the suggested changes, to early/late work penalties, come into effect from late March, 2017.

The FWC has proposed that the suggested change to Weekend and Public Holiday Work Penalty Rates take effect from the 1st of July, 2017. However, it has been proposed that these changes are phased in, in an attempt to reduce the negative impact on affected employees. Therefore, it is unknown at this point if there will be transitional provisions, or over what period of time these will take place.

The above information is based on currently available information from the Fair Work Commission, as supplied to us, at Knox Tax, by Sheena Kane. It is current as of 25th February, 2017.
We’ll be sure to bring you further updates – as the FWC makes and publishes its decisions.

So, give us a call at Knox Taxation & Business Advisory if you have any concerns or questions about Penalty Rates for your workers. Getting your pay rates right is important, and we can put you in touch with the right specialists, like Sheena, whenever you’re not sure about whether you’re in line with any current worker policies.

It’s always better to be safe than sorry, and, at Knox Tax, we’ll always be on hand, and at the end of the phone, to provide you with the latest decisions that are applicable to your work place.

Kindest Regards,
Coral Page – Principal