Penalty rates slashed

The FairWork Commission (FWC) has decided the fate of workers in fast food, retail and hospitality. 

After significant delays, the commission has released its decision to reduce Sunday penalty rates for fast food, retail and hospitality employees.

Hospitality and retail employees will also see their public holiday rates cut from 250 per cent to 225 per cent.

The Franchise Council of Australia (FCA) and the Australian Retailers Association (ARA) have welcomed the decision.

"The FCA welcomes today's FairWork Commission decision as a balanced and measured response to the review of the rate of penalty rates in a number of awards in the retail and hospitality sectors,”  said Bruce Billson, FCA executive chair.

He said a recalibration of penalty rates will bring about increased opportunities to work and to better enable businesses to trade at customer-friendly hours.

"The adjustment to the rate of penalty rates for franchise businesses in the retail, fast food and hospitality sectors is a positive step towards the improving small business operations and their capacity to employ local people and compete with the many larger enterprises that have already secured adjusted penalty rates through union-endorsed enterprise bargaining agreements".

The FWC said it agreed with the Productivity Commission there were likely to be some "positive" employment effects from the reductions.

"The evidence also supports the proposition that a reduction in penalty rates is likely to lead to increased trading hours, an increase in the level and range of services offered on Sundays and public holidays and an increase in overall hours worked," FWC president Iain Ross said.

However, Ross noted Sunday penalty rates would still be higher than for Saturdays.

Sunday rates for hospitality workers will fall from 175 per cent to 150 per cent while those for fast food workers will drop from 150 per cent to 125 per cent.

Retail workers face a reduction from 200 per cent to 150 per cent.

The Australian Industry Group (Ai), which represented the fast food industry in the case also welcomed the decision.

“In the fast food industry, weekends and evenings are peak times. Regular business hours have little relevance to businesses in the fast food industry and, therefore, penalty rates that were designed many decades ago around regular business hours need to be re-set,” said Innes Willox, Ai Group chief executive.

“In the decision, the Commission has recognised that existing Sunday penalty rates in the fast food industry are not fair for employers and no longer relevant.

“The new penalty rates will be phased in over at least two years to reduce the impact upon employees.”

However, Australian Council of Trade Union president Ged Kearney said workers on minimum wages relied on weekend penalty rates to survive.

"This is a bad day for workers in this country," she told reporters.

Russell Zimmerman, executive director of the ARA, said today’s decision is welcomed by the body and its members.

“Reducing Sunday rates from double time to time and a half will give employers approximately four to five percent reduction on wages which they will be able to reinvest in employing more staff, increasing employment in the retail industry,” he said.