Sunday penalty rates cut by up to 25%, hitting retail and hospitality workers

Extract from The Guardian

Fair Work Commission’s decision to slash penalty rates means a cut in take-home pay of up to $6,000 a year for some employees, say unions

Hospitality and retail workers to be hit by Sunday penalty rates cut

Paul Karp

Thursday 23 February 2017 18.35 AEDT

Hundreds of thousands of workers will be hit by cuts to Sunday and public holiday penalty rates in the retail, pharmacy, fast food and hospitality industries of between 25 and 50 percentage points.
The cuts unveiled by the Fair Work Commission do not apply evenly across the board – casuals in the hospitality industry will be spared and restaurants and cafes are not affected – but do amount to a cut in the take-home pay for a sizeable proportion of the workforce.
Ged Kearney, president of the Australian Council of Trade Unions president, said the decision would reduce workers’ take-home pay by up to $6,000 a year, although that figure was disputed by small business representatives.

Unions immediately called for the Turnbull government to protect workers’ pay and the decision will play into Labor and Greens attacks on the Coalition, as both parties have promised to prevent or offset rate cuts.
Justice Iain Ross, president of the commission, said it had decided to cut Sunday and public holiday rates because they were not a “fair and relevant” safety net and agreed with employers that reducing rates could boost employment. He acknowledged the cuts to Sunday rates would “inevitably cause some hardship to the employees affected”, and promised transitional arrangements would mitigate that hardship.

The commission chose to cut Sunday rates but not as low as Saturday levels because “Sunday work has a higher level of disutility” for workers, although to a lesser extent than in the past.
Ross said evidence from business owners demonstrated that the current level of Sunday rates had led them to restrict trading hours, reduce staff levels and restrict the services provided.
Cutting rates would therefore increase trading hours, and the “level and range of services” on Sunday and public holidays, he said.
The commission will now take submissions about how slowly to phase-in the Sunday rate cuts, and in its reasons suggested “at least” two years would be appropriate. Cuts to public holiday rates will take effect from 1 July.
The commission chose not to cut Saturday penalty rates.
Labour law expert, Andrew Stewart, told Guardian Australia the decision also exempted workers in restaurants, cafes and clubs from cuts because they are not covered by separate awards, not the hospitality award.
Kearney said the federal government should have made a submission to the commission opposing penalty rate cuts.
“Malcolm Turnbull ... unless he acts immediately, will forever be remembered as the prime minister who oversaw an attack on the wages of the lowest paid people in our economy.”
She called for the Fair Work Act to be amended to prevent a cut to take-home pay.

In relation to Sunday rates, the commission cut:

• Hospitality award rates for full-time and part-time workers from 175% to 150%
• Fast food award rates for level one employees from 150% to 125% for full-time and part-time employees and from 175% to 150% for casuals
• Retail award rates for full-time and part-time employees from 200% to 150% and for casuals from 200% to 175%
• Pharmacy award rates from 200% to 150% for full-time and part-time workers for work between 7am and 9pm, and from 200% to 175% for casuals at the same times.

Sunday rates remained at 175% for casuals in the hospitality industry, and there was no cut for level two and three employees in the fast food award.
The commission cut public holiday rates in the hospitality and retail awards – except for clubs – from 250% to 225% for full-time and part-time employees. The casuals’ rate will be 250%.

Ross said the retail and hospitality industries had a number of “distinguishing characteristics”, including that consumers expect those services on weekends.
The decision therefore did not warrant a cut of penalty rates in other awards, each of which would be decided on its merits, he said.
The chief executive of the Council of Small Business Australia, Peter Strong, accused unions of plucking the $6,000 figure “out of mid air”.
Strong said 80% of workers were employed by big businesses such as Coles and Woolworths with enterprise agreements, which are not directly affected by the decision, and the Shop Distributive and Allied Employees’ Association had negotiated lower penalty rates than in the award.

“At the moment we know the unions are carrying on like it’s the end of the world, the apocalypse ... 80% of [workers] will not notice a change because they are already on 150% or already on the lower rate in the hospitality area.”
In a statement the employment minister, Michaelia Cash, pinned the decision on the opposition leader, Bill Shorten, noting that he had changed the law to require penalty rates be included in four-yearly award reviews.
Cash reiterated that the Turnbull government believed penalty rates should be set by the independent Fair Work Commission. “The government has no plans to change the way penalty rates are set.”At a media conference, Cash noted the commission had found there would be “some positive employment effects” from cutting rates, although it said the size of the effect was unknown.
Cash accused Labor and unions of a scare campaign implying that Sunday rates had been abolished when they had only been “more closely aligned” with Saturday rates.
In the political arm wrestle that followed the decision, the government also pointed out that Shorten had appeared at a media conference blasting the FWC decision with a young worker called Trent Hunter, who claimed to be a victim of the decision.
Hunter said during the conference with Shorten he would lose $109 a week – which appears incorrect because he is an employee of Coles supermarkets. Coles is unaffected by the decision because staff are employed on a workplace agreement, not the award which is affected by the commission’s decision.

Adam Bandt (@AdamBandt)

BREAKING: Sunday & public hol rates cut for retail, hosp & fast food workers. Greens will move in parl to stop cuts coming into effect.

February 23, 2017

The result in the long-running case was expected after a 2014 decision by the commission to cut Sunday penalty rates by about $4 an hour for lower-level casual employees in the restaurant industry, which unions feared would act as a precedent.
In December 2015 the Productivity Commission review of workplace laws recommended Sunday penalty rates be cut to Saturday levels in hospitality, retail and entertainment industries.
It said the social impacts of Sunday and Saturday work were similar; or, more simply: “Sunday is not special anymore.”
Fearing the commission may cut rates, the Greens promised before the last election to put a floor on penalty rates or require that Sunday rates be higher than Saturday levels.
In January Shorten responded with a proposal that cuts to penalty rates should be accompanied by beneficial pay and conditions so workers are not left worse off.