Penalty rate cuts to invigorate trade

A million workers could be affected as penalty rates are slashed to reinvigorate Sunday trade, flicking cash back to employers to get more staff on the shop floor.


The Fair Work Commission will slash rates, a move outraged unions believe will unfairly cut up to $6000 a year from the pay of Australia’s poorest people.

Labor leader Bill Shorten said the decision turned “three decades of industrial relations modernisation” on its head.

But Employment Minister Michaelia Cash says the reduction in penalties is a direct result of a review process Mr Shorten put in place as workplace minister.

Sunday had been a boon for retail and hospitality workers who can rake in up to 200 per cent of their normal rate.

But in submissions to the commission, business groups argued the unsustainable rates were hacking away at the bottom line of small business.

The commission agreed, announcing cuts on Thursday across the hospitality, fast food, retail and pharmacy industries.

Sunday rates for full-time and part-time hospitality workers will fall from 175 per cent to 150 per cent. Those for fast food workers will drop from 150 per cent to 125 per cent.

Retail full-time and part-time workers face a reduction from 200 per cent to 150 per cent.

And pharmacy full-time and part-time workers working from 7am to 9pm will see penalties cut from 200 per cent to 150 per cent.

Casual workers’ pay on Sundays will be 25 per cent more that their full-time and part-time colleagues, although the Australian Retailers Association wants to fight that.

They say many rural businesses can’t trade on Sundays or public holidays or, if they do, owners have to work seven days, unable to afford anyone else.

“A reduction in penalty rates is likely to lead to increased trading hours, an increase in the level and range of services offered … and an increase in overall hours worked,” FWC president Iain Ross said.

The commission said employers could hire more part-time employees rather than leaving them as casuals.

Mr Shorten said no penalty rates were safe under the Turnbull government.

“We will do everything in our power in the parliament and the courts to remedy this bad decision,” Mr Shorten told reporters in Sydney on Thursday.

Unlike employer groups, unions say a cut to penalty rates will only have a modest, if any, impact on job creation.

Australian Council of Trade Union president Ged Kearney said workers on minimum wages relied on weekend penalty rates to survive.

“This is a bad day for workers in this country,” she told reporters.

She said it was a “complete furphy” to suggest it would have any impact on the unemployment rate.

“People whose pay is going to be cut … will simply have to work more hours to make up that take-home pay,” she said.

The public holiday changes will take effect from July 1, while the commission will hear submissions on how the Sunday penalty rate changes should be brought in.