Summary of the Fair Work Commission's Penalty Rates Review regarding penalties.

Penalty Rates Decision: What it means for your business?

The long-awaited decision from the Fair Work Commission‘s (FWC) Penalty Rates Review of the Fast Food Industry AwardRestaurant Industry Award, and General Retail Industry Award, has finally been handed down.

summary of the decision is also available.

1. Sunday, Public Holiday Penalties

The key outcomes from this decision include the reduction of Sunday and Public Holiday penalty rates as outlined below:

Fast Food Industry Award Sunday – to be phased, starting 1/7/17 Public Holidays – from 1 July 2017
Full time and part time Level 1 – 125% (from 150%); L2/3 150% (no change) 225% (from 250%)
Casual Level 1 – 150% (from 175%); L2/3 175% (no change) 250% (from 275%)
Restaurant Industry Award Sunday – to be phased, starting 1/7/17 Public Holidays – from 1 July 2017
Full time and part time 150% (no change) 225% (from 250%)
Casual Level 1/L2 150%; L3-6 175% (no change) 250% (no change)
General Retail Industry Award Sunday – to be phased, starting 1/7/17 Public Holidays – from 1 July 2017
Full time and part time 150% (from 200%) 225% (from 250%)
Casual 175% (from 200%) 250% (from 275%)

When will these changes come into effect?

  • Public Holiday Penalties – the reduction to public holiday penalty rates will take effect from 1 July 2017.
  • Sunday Penalties – the FWC stated in their decision that the reduction in Sunday penalty rates should take place in a series of adjustments which would commence on the 1 July 2017 and be adjusted on the 1 July each subsequent year.

However, the number of annual instalments is yet to be determined. The Commission stated it is likely that at least 2 instalments, but less than 5 would be required, and that the Retail Award’s significant reduction in Sunday penalty rates (from 200% to 150%) for full-time and part-time employees would likely require a longer period of adjustment compared to other penalty rates adjustments.

2. Night Penalties

The Fast Food and Restaurant Awards will also have changes to their late night and evening work penalties. These include:

  • Evening Work Penalty: The Fast Food award will change the time of the evening work penalty from 9pm till midnight, to 10pm till midnight.
  • Late Night Penalty: Under the Fast Food award and Restaurant Award the times the late-night penalty occurs from midnight till 7am, to midnight till 6am.

The late night and evening work penalty changes will come into effect from 27 March 2017

3. How does this decision affect the operation of your enterprise agreement?

There will be no effect on the operation of your current enterprise agreement, unless your agreement specifically references the penalties from the relevant award. Once the phasing arrangements are released you may want to re-evaluate your current enterprise agreement and determine your strategy moving forward.

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