A Full Bench of the Fair Work Commission (FWC) has this morning handed down its long awaited decision on weekend and public holiday penalty rates in the retail and hospitality industries. 

The FWC has reduced the Sunday and public holiday penalty rates that currently apply to many employees in the hospitality and retail industries on the basis that the “disutility” associated with working on a Sunday is “much less than in times past”.

Backlash from the political parties and unions has been swift. Opposition leader Bill Shorten has vowed that the Labor party will do everything in its power to remedy the “bad decision”, while the Greens have indicated that they will seek to stop the measures from being implemented.

The decision was part of the 4-yearly modern award review process, during which various employer bodies made applications to vary the penalty rate provisions in the following modern awards:

Please click here to view the table. 

In addition to the submissions of the principal parties, over 5,800 public contributions were received from individual employees and employers. A further 26 submissions were received from organisations including Members of Parliament and State governments, student organisations, community groups, small businesses, churches and industry groups.

What will change?

By way of summary:

1. Sunday penalty rates will be reduced as set out in the following table:

Please click here to view the table. 

2. In the Restaurants and Fast Food Awards there will be variations to some penalty provisions in relation to early and late night work.

3. Public holiday penalty rates will be reduced as set out in the following table:

Please click here to view the table. 

4. Saturday penalty rates are to remain the same in each of the awards. However, a review of Saturday penalty rates in the Clubs and Pharmacy Awards will take place.

When do the changes come into effect?

Transitional arrangements will be used to “mitigate the hardship caused to employees who work on Sundays”. However, the FWC has not reached a concluded view on what the transitional arrangements will be and proposes to seek submissions on that issue. Provisionally, the FWC has expressed a view that the changes to Sunday penalty rates should be phased-in through a series of annual adjustments.

Given the “limited impact of the variations” regarding the early/late night penalties, it is the FWC’s intention that the variations commence operation on 27 March 2017, following a period of consultation.

Changes to public holiday rates are to take effect on 1 July 2017.

A more detailed summary of the changes proposed for each relevant modern award will follow shortly. 


Erin Kidd

Kate Hollings