You may have already heard the news that the Fair Work Commission today handed down a decision regarding what penalty rates should apply to certain workers on certain days. Already the unions are galvanised into action to fight against the decision. Outrage is growing! Businesses will save thousands on wages at the expense of the workers! It’s the end of the world as we know it!
Well maybe not, and certainly not yet.
The Commission has not gone quite as far as is being reported in some sources and care needs to be taken when reacting to this news. The decision needs to be read carefully or businesses could find themselves in a great deal of trouble with their payroll.
For example, the proposed Sunday penalty rate for permanent employees under the Hospitality Award will reduce from 175% to 150% but there will be no changes to the casual Award rate. Under the Fast Food Award the reductions in rate both drop by 25% of the current rate on a Sunday but this only affects Level 1 employees.
These proposals currently only apply to the Awards below:
Sunday penalty rates will be reduced in some Awards but there are still further submissions to be made about how the changes will be phased in.
The Full Bench favours a transition that occurs:
Although it does not favour them currently, the Commission will also look at whether “take home pay orders” might apply for existing employees to mitigate against the Sunday penalty rate change by preventing a reduction in their current rate of pay.
The unions and employer groups will make submissions between now and April, after which time the Commission will deliberate further with a decision likely to delivered in May 2017.
The Commission is still considering further rate changes in the Fast Food and Restaurant Awards.
Before you rush to adjust your payroll, check the wording of your employment contracts.
These changes will only apply to those of your employees who are paid in accordance with Award rates.
If you have agreed on a specified monetary or percentage payment of an hourly rate in the contract or agreement, you are still bound to pay those amounts, even if the Award rate decreases. You cannot change those amounts without the employee’s consent.
This article was prepared by Elizabeth Olsson
Practice Area: Employment