Sunday penalties cut plan revealed

The Australian, June 5, 2017

Cuts to Sunday penalty rates for hundreds of thousands of workers will start within weeks but will be phased in over two to three years.

The Fair Work Commission announced this afternoon that penalty rates cuts for Sunday workers in the retail, hospitality, pharmacy and fast food sectors will start on July 1 but not be fully implemented until 2019 or 2020, depending on the industry.

The phase-in period will disappoint employers, who had wanted the cuts to be fully implemented by next year, but will anger unions, who are strongly opposed to the reductions.

Retail workers will have their Sunday penalties cut from 200 per cent to 195 per cent on July 1, before incurring 15 percentage point reductions annually for three years.

The rate will fall to 150 per cent by July 2020.

It will be a similar timetable for full-time and part-time pharmacy workers, with their rate to fall in four instalments to 150 per by 2020.

Hospitality workers will suffer a five percentage point fall to a Sunday penalty rate of 170 per cent in July, before falling by 10 percentage points annually for the next two years. The penalty rate will be 150 per cent at July 2019.

Permanent and full-time fast food workers will see their penalty rates cuts by 5 percentage points to 145 per cent in July, falling by 10 percentage points annually to 125 per cent by 2019.

Cuts to public holiday penalty rates will be full implemented from July 1 this year.

Former ACTU president, Martin Ferguson, who is chair of Tourism Accommodation Australia, said he would have preferred the penalty rate cuts in hospitality to be fully implemented over two years.

“We realise that reforming penalty rates was a tough decision for the FWC, but ultimately this was essential and we are pleased that logic and long-term vision won out in the end.

“The hotel sector is going through its largest-ever expansion period and given that the industry is a 24/7 industry it was important that rates on Sundays and public holidays reflect the modern working environment.

“We have always supported workers being remunerated extra for working on weekends and public holidays, but the compensation needs to be fair and sensible. It’s now time for all parties to accept the FWC decision and transitional arrangements and ensure a smooth transition.”

Retailers said the “excessive” phase in period would delay the extra jobs that employers assert would be created if penalty rates were cut.

The Australian Retailers Association’s executive director Russell Zimmerman said the Sunday penalty cut should have been full implemented by July next year.

“Retailers were expecting to able to ramp up employment via a quick transition to more sustainable penalty rates, (and) the announced arrangements will only hinder the immediate benefit to employment and growth within the sector,’’ he said.

“The commission found that a reduction in penalty rates will allow retailers to extend staff working hours and increase employment across the board, therefore these sluggish arrangements will unnecessarily delay the creation of new retail jobs,”

United Voice confirmed the union would be appealing the commission’s “unfair” decision to the Federal Court and called on employers not to cut SUnday and public holiday penalty rates while the legal proceedings took place.

The union’s national secretary, Jo-anne Schofield said the workplace relations system had “completely failed the hundreds of thousands of Australians who give up time with their loved ones to work on weekends and public holidays”.

“We cannot turn away and accept a decision that impacts so dramatically on our members and, potentially, on all workers,’’ she said. “The decision must be challenged. This is a cut hospitality workers can’t afford and don’t deserve.”

Opposition workplace relations spokesman Brendan O’Connor slammed the “appalling” decision which came at a time when wages were falling behind inflation.

“It doesn’t matter if the cuts are phased in over two or three years, the damage is the same – people will be losing real money,’’ he said.

“Labor does not support any cuts to penalty rates and we argued strongly against any cuts. Malcolm Turnbull must now stand up for Australian workers and support Labor to stop these pay cuts from occurring.”