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Sunday and Public Holiday Penalty Rates Slashed for Retail and Hospitality

As you may be aware, on 23 February 2017 the Fair Work Commission decided to slash Sunday and Public holiday penalty rates for retail, hospitality, fast food and pharmacy workers.  Penalty rates will be cut between 25%-50%.

The Fair Work Commission had been considering bids from various groups to reduce Sunday penalties rates since 2015. This reform was one of a number of workplace recommendations made by the Productivity Commission last year.

The reasoning behind this decision is to make it easier for traders to open on a Sunday and give their staff more hours or be able to put on extra staff.  By reducing Sunday rates from double time, to time and a half, it will give employers a 5% reduction in wages that they can use to reinvest in staff in other ways.  It could potentially make the difference of casual employees being offered the security of part time employment or part time employees being offered full time employment.

The Fair Work Commission have stated that they have no intention of this decision flowing on anywhere else.  Changes to the Public holiday penalty rates will take effect on 1 July 2017 while the changes to Sunday penalty rates are still being finalised.

With 725,000 people currently out of work in Australia, the argument to reduce penalty rates could go either way!

The for:

  • Employers can employ more staff
  • Venues can afford to operate on Sunday’s
  • Should make trading on Sunday and Public Holidays more viable for small businesses
  • Businesses will make more money on Sunday trading
  • Prices may reduce – no more Sunday bill loadings in restaurants?

The against:

  • Many of these employees are on minimum wage and rely on penalty rates to put food on the table and pay the bills
  • Earning double time is a fair trade for not having part of your weekend
  • Where will these savings go? There is no guarantee it will be to hire more staff
  • Reduced income = reduced spending

A large portion of the population feel these cuts are unfair as employees working in these industries should be financially compensated for working late nights and weekends that the rest of us do not.

If you would like a pay rates ‘health check’ to make sure you are paying correctly give HR Gurus a call on 1300 959 560 and one of our experienced HR professionals can help.

Written by resident HR Guru Natalie Bol

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