Further developments on penalty rate cuts

Following on from the proposed changes to penalty rates announced by the Fair Work Commission last month, there were further determinations made last Friday (17 March 2017).

In this article, we take a look at what was proposed and what has changed. 

Late night penalty rates

The Commission had originally intended that changes to late night penalties under the Restaurant Industry Award 2010 (the Restaurants Award) and the Fast Food Industry Award 2010 (the Fast Food Award) would come into effect on the first pay period after 27 March 2017.

However, the Commission has decided to postpone those changes and ordered that they commence on 1 July 2017 at the same time as the changes to public holiday rates.

The late night penalties that will apply from that date are as follows:

Both Awards                            15% loading for work performed between 12.00am and 6.00am

The Fast Food Award              10% loading for work performed between 10.00pm and 12.00am

What this means

  • The late night loading of 15% will now be paid for one less hour under both Awards – to 6.00am rather than 7.00am
  • The late night loading of 10% will now be paid for one less hour under the Fast Food Award – it was previously to be paid from 9.00pm

Both rates are paid in addition to any casual loading.

Public holiday rates

Draft determinations have been published setting out the new rates to be applied from 1 July 2017. Parties have seven days to comment on the determinations before they become final.

What this means

Public holiday penalty rates will be a uniform 225% of the minimum Award hourly rate for full-time and part-time employees and 250% of the minimum Award hourly rate for casual employees (which includes the casual loading) under five of the Awards reviewed.

Those are:

Hospitality (General) Industry Award 2010 (cl. 32)

Restaurant Industry Award 2010 (cl. 34)

General Retail Industry Award 2010 (cl. 29)

Fast Food Industry Award 2010 (cl. 30)

Pharmacy Industry Award 2010 (cl. 31)

But remember!

  1. These changes will only apply in full to those of your employees who are paid on the minimum Award hourly rate.
  2. If you are paying above the Award rate, you cannot reduce existing wage rates without the consent of the relevant employee in order to absorb some or all of the existing penalty rate increases.

If you are unsure how this will affect your wage arrangements, please contact a member of our employment law team for assistance. 

This article was prepared by Elizabeth Olsson, Senior Solicitor

Practice Area: Employment , Liquor & Hospitality

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