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The Wrap on the Penalty Rate Cuts

With the Fair Work Commission decision to cut Sunday and public holiday rates what will this mean for small business in the affected sectors? The rate cuts apply to hospitality, retail, pharmacy and fast food industries for full time, part time and some casual workers however we will not see at this point in time Sunday wages drop to the same level as Saturday rates. This has not been without months of deliberation with the Commission handing down its ruling on whether Sunday rates should be in line with Saturday rates. The changes to rates are outlined below;
  • Retail: In the retail award, Sunday rates for full and part time workers will decrease from 200% of the regular hourly rate to 150%. For casual workers the rate will decrease from 200% to 175%.
  • Hospitality: In the hospitality award, the loading for full and part time workers will be reduced from 175% to 150%, while there will be no change for casuals.
  • Fast food: Full and part time “Level 1” employees in the fast food sector will have their Sunday rates cut from a 150% loading to 125%. Casual “Level 1” employees will have their Sunday loading cut from 175% to 150%.
  • Pharmacy: There will be changes to pay rates for pharmacy staff working between 7:00am and 9:00pm, while those working before 7:00am and between 9:00pm and midnight will continue to get the existing loading.
Changes to public holiday penalty rates in the hospitality and retail awards will come into effect on 1 July, 2017 for full time and part time workers. This will mean a cut from 250% to 225%. Casual hospitality workers will received a 250% loading on a public holiday instead of the current 275% and retail workers will also be cut down to 250% rather than the current 275%. In outlining the decision the Commission say that while working Sundays might not have the “disutility” that it once did for workers, Sunday work still did have an impact and this formed part of the Commission’s decision not to pull Sunday rates completely in line with Saturdays in the retail and hospitality sectors. “Except in fast food awards, we have not reduced the Sunday rates to the same rate as Saturday,” a commission representative said. “Sunday work has a higher level of disutility, but much less than in times past.” Employers are not restricted to pay on Award rates, often choosing to pay above in order to attract talent. Employers in these sectors are encouraged to review their employment contracts and policies for any necessary amendments.


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