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Background

The:

four-yearly review of employment law modern awards has been conducted by the Full Bench of the Fair Work Commission
Fair Work Commission received over 5,900 submissions, and heard from 143 lay and expert witnesses over 39 days of hearing throughout 2015 and 2016
purpose of the review was to ensure that the modern awards continue to achieve their objective to provide ‘a fair and relevant minimum safety net’ and, of course, remain consistent with relevant workplace laws

Rationale for Penalty Rates

With respect to penalty rates:

the original rationale for penalty rates was to compensate employees for working outside ‘normal hours’ and to deter employers from scheduling work outside these hours
however, this rationale has shifted in more modern times and the Fair Work Commission has concluded that deterrence is no longer an objective of the modern awards in relation to weekend and holiday penalty rates
this means the primary objective of the modern awards is now compensation of employees
the hospitality and retail sectors made applications to vary (and ultimately reduce) the penalty rate provisions in relation to weekend and public holiday rates
employers have been pushing for these changes, with many asserting that they have had to reduce labour costs on Sundays and public holidays by restricting trading hours and limiting staff levels, leading to restrictions on the type and range of services provided

Affected Awards

The employment law decision of the Fair Work Commission relates only to businesses under the following modern awards:

Weekend Rates

In respect of the weekend rates aspect of the Fair Work Commission decision:

they reviewed Saturday rates for the Fast Food, Hospitality, Restaurant, and Retail Awards and were satisfied that the rates achieved the modern award’s objective and did provide a fair and minimum safety net
the Clubs and Pharmacy Awards are subject to further consideration in this regard
in relation to Sunday rates, the Fair Work Commission decided that the Fast Food, Hospitality, Retail and Pharmacy Awards did not provide a fair and relevant minimum safety net consistent with workplace law
except for the Fast Food Award, Sunday rates for these awards were not simply reduced to Saturday rates
it was recognised that there remains a higher level of disutility in working Sundays rather than Saturdays, although the extent of that disutility is much less than in times past and hence some reduction is warranted
for the Fast Food Award, Sunday rates were levelled with Saturday rates for casual, part-time and full-time employees but career employees went unscathed
the Fair Work Commission has expressed a provisional view that the reductions should take place with a series of annual adjustments on 1 July each year (starting 1 July 2017) in conjunction with any increases to modern award minimum wages from Annual Wage Review decisions
casual employees can rest at ease knowing that their applicable rates will (currently) remain an extra 25% over other employees

Early/Late Loading rates

In respect of the early/late loading rates aspect of the Fair Work Commission decision:

some provisions concerning early morning/late night work were changed in the Restaurant and Fast Food Awards, winding back the clock from 7am to 6am as most cafes open at that time in capital cities
work performed between midnight and 6am will attract a 15% additional payment
these employment law changes will be in effect as of late March 2017
the Fair Work Commission was not persuaded to make changes proposed to Pharmacy Award, Clubs Award and Restaurant Award loadings

Public Holiday Rates

In respect of the public holiday rates aspect of the Fair Work Commission decision: [...] READ MORE →

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