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The Fair Work Commission announced today that Sunday penalty rates in the retail, fast food, hospitality and pharmacy industries will be reduced from the existing levels.

Senior employment lawyer Mike Smith discusses the ramifications of this announcement.

In an historic decision handed down by the Fair Work Commission, Sunday retail workers generally will have their penalty rates reduced from double time to 1.5 times the usual hourly rate while casuals will be reduced from double time to 1.75 times the award rate.

Hospitality full-time and permanent part-time employees face a reduction from 1.75 to 1.5 times the usual hourly rate whilst casual hospitality workers will remain unchanged.

Fast food employees’ Sunday rates will be reduced from 1.5 to 1.25 times the usual hourly rate with casuals being reduced from double time to 1.75 times the usual hourly rate.

These reductions will commence from July 2017.

The decision has outraged the Union movement and employees. This is understandable seeing that lost wages from the reduced rates will likely affect those who are most vulnerable and living just at or below their means. It will also impact the economy in the event that further jobs are not created with existing workers having less money in their pay packets each week.

On the other hand, business and employers generally have welcomed the reduction and have indicated that this will allow them to trade on better terms which could lead to further people being employed. Some businesses may be encouraged to open on Sunday. Does this make up for the drop in rates? That’s the question.

No doubt there will continue to be a philosophical discussion concerning the current employment conditions and whether the existing “double-time” pay rates for Sundays are still applicable in our modern society. Businesses and employers generally have been arguing for a reduction of penalty rates for many years and this appears to be the first significant incursion into workers’ pay conditions.

There is a deep history to workers having Sunday off, both from a religious and workplace reform perspective. And while history to some may be just yesterday’s news, and supposedly malleable to prove a point, for perspective it is essential not to overlook the previous landscape and the carving of rights and conditions pertaining to employers and employees. Specifically, in terms of the exploitation of workers by their employers which we know became rife during the Industrial Revolution and necessarily fueled the growth of the present day Union movement and the cementing of work conditions that apply to Australian employees.

Viewed through the above prism, and taking into account recent alleged abuses in this area (7-Eleven worker and wages exploitation) Unions and employees are loath to give in to encroachments on hard fought entitlements and conditions. However, the general trend of consumers expecting shops and services to be available 7 days a week and in some cases 24/7 no doubt clashes with these historic workers rights.

Businesses and employers should review their Employment Contracts and wage conditions generally in advance of the expected reduction to commence later in the year. Employees under an existing EBA will generally not be affected by the decision.

If you would like more information or want to obtain the best possible chance of a successful outcome in your dispute, please contact our Commercial Litigation Department Manager, Amanda Heather on direct line 07 5506 8245, email aheather@attwoodmarshall.com.au or free call 1800 621 071.

We have an experienced dedicated Commercial Litigation team that practices exclusively in these areas.

Please click here to access our team brochure with details of our professional staff.

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Charles Lethbridge

Charles Lethbridge

  • Senior Associate
  • Commercial Litigation
  • Direct line: 07 5506 8240
  • Mobile: 0421 885 195