Some Sunday and public holiday penalty rates in modern awards will fall from 1 July 2017, affecting the hospitality, fast food, retail and pharmacy sectors, following the Fair Work Commission's decision earlier today as part of its four-yearly review of modern awards.

There will be transitional arrangements to phase the changes in, which are yet to be determined.

If you engage people in these sectors, you should consider seeking legal advice on whether this decision enables you to reduce Sunday and public holiday rates for your employees.

Generally, Sunday rates and public holiday rates were reduced by around 25%. However, the amendments varied from award to award, and depending on whether the employees were casual or full-time or part-time employees.

Changes to the Sunday penalties rates

  • Hospitality Industry (General) Award 2010: for full-time and part-time employees from 175% to 150%
  • Fast Food Industry Award 2010: for full-time and part-time employees from 150% to 125%, and for casual employees from 175% to 150%
  • General Retail Industry Award 2010: for full-time and part-time employees from 200% to 150%, and for casual employees from 200% to 175%
  • Pharmacy Industry Award 2010: for full-time and part-time employees from 200% to 150%, and for casual employees from 200% to 175%.

In reducing Sunday penalty rates, the Fair Work Commission found that there is still a higher level of disutility for some workers working on Sunday although the extent of the disutility is lower than it was in the past.

The Fair Work Commission also acknowledged that the reduction in penalty rates would inevitably cause hardship to some employees, but that could be offset by transitional arrangements to phase the changes in.

Changes to the holiday penalty rates

  • Hospitality Award: for full-time and part-time employees from 250% to 225%, and for casual employees from 275% to 250%
  • Restaurant Industry Award 2010: for full-time and part-time employees from 250% to 225%
  • Retail Award: for full-time and part-time employees from 250% to 225%, and for casual employees from 275% or 250% to 250%
  • Fast Food Award: for full-time and part-time employees from 250% to 225%, and for casual employees from 275% to 250%
  • Pharmacy Award: for full-time and part-time employees from 250% to 225%, and for casual employees from 275% to 250%.

There are likely to be further changes to penalty rates as the Fair Work Commission continues with its four-yearly review of modern awards. In particular, the Commission is continuing to assess the position with respect to penalty rates for employees working in restaurants and hair and beauty.