Under the changes, casual employees covered by the General Retail Industry Award 2010 will receive increased penalty rates from 1 November 2018. The increases, which will be phased in over a period of three years, will see casual employees entitled to an additional 25% penalty rate on Saturday, and an extra 25% penalty rate for all work performed after 6pm on weekdays by March 2021. This is to address the disparity between permanent employees and casuals.
While permanent employees currently earn penalty rates for Saturday work and evening work, casuals do not earn penalty rates for evening work and only receive a 10% loading for Saturday work. Notably, the FWC recognised the distinction between the casual loading to which casual employees are entitled, which is to compensate them for the nature of their employment and the fact that they do not receive the entitlements that permanent employees receive (such as annual leave, personal leave, notice and termination and redundancy compensation) and these penalty rates, which are to compensate for the inconvenience of working late into the evening and at weekends. In doing so it stated that the two loadings are “separate and distinct forms of compensation for different disabilities”.
In accordance with the FWC decision, the staged increases will be implemented in accordance with the following timeline:
The FWC also decided to phase in a 25% reduction to the Sunday penalty rates for full-time, part-time and casual shift workers.
The decision has been largely praised by unions as a necessary step in recognising the disutility of weekend and after hour shifts for both casual and permanent employees.
For employers who rely on casual employees for evening and Saturday work this could have significant cost implications. If you require assistance in ensuring your business complies with the changes or more generally need advice on the use of, and risks attaching to the use of, casuals within your business, please feel free to get in touch with the McCabe Curwood Employment group.