In a move which is sure to create controversy among employers
and business groups, Prime Minister Julia Gillard has announced
that the Fair Work Act will be amended to include a new modern
award objective which essentially enshrines an employee's right
to be paid penalty rates into law.
Speaking at an ACTU work summit in Canberra, Ms Gillard
indicated that a specific provision will be inserted into the Fair
Work Act that guarantees that workers covered by a modern award
will receive higher rates of pay for work performed outside of
Outlining the changes, Ms Gillard stated: ''We will
ensure that penalty rates, overtime, shift work loading and public
holiday pay are definite, formal considerations for the Fair Work
Commission when it sets award rates and conditions. We will make it
clear in law that there needs to be additional remuneration for
employees who work shift work, unsocial, irregular, unpredictable
hours or on weekends and public holidays.''
The announcement has been welcomed by the ACTU and represents a
victory for unions in their campaign for legislative protection of
penalty rates. In contrast, the proposed change has already
attracted criticism from business groups that locking penalty rates
into law will further reduce flexibility for employers and have a
significant impact on small businesses.
The decision by the Federal Government is likely to be seen as a
rebuff to business, which has been lobbying for work performed at
night or on weekends to be paid at the same rate as weekday work,
particularly in the retail and hospitality sectors. This also comes
in the wake of the recent rejection of Senator Nick Xenophon's
proposed bill to exempt small businesses from paying penalty
The announced change will mean that the Fair Work Commission
will not be able to exclude penalty rates from a modern award when
it determines award rates and conditions, regardless of the nature
of the industry to be covered by the award, or the effect this will
have on employers.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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