A Full Bench of the Fair Work Commission made a
significant ruling this morning in which it reduced Sunday and
public holiday penalty rates in five modern awards.
A Full Bench of the Fair Work Commission
(Commission) made a significant ruling this
morning in which it reduced Sunday and public holiday penalty rates
in five modern awards.
What you need to know
Sunday and public holiday penalty rates will be reduced in five
modern awards across the retail, hospitality, restaurant, fast food
and pharmacy sectors.
From 1 July 2017, the reduction to public holiday rates will
The Commission is proposing to seek submissions from interested
parties regarding arrangements to transition in the reduction in
Sunday penalty rates.
The ruling was a part of the Commission's ongoing four
yearly review of modern awards during which the Commission is
tasked with determining whether each modern award achieves the
modern awards objective. If a particular modern award does not,
then the Commission can vary the modern award.
At the commencement of the review process, interested parties
were invited to make applications to vary modern awards. Various
employer bodies made applications to vary the penalty rates
provisions in a number of modern awards in the hospitality and
The modern awards that are the subject of the ruling are the
Hospitality Industry (General) Award 2010 (Hospitality
Award), the Fast Food Industry Award 2010 (Fast
Food Award), the General Retail Industry Award 2010
(Retail Award), the Pharmacy Industry Award 2010
(Pharmacy Award) and the Restaurant Industry Award
2010 (Restaurant Award).
What are the reductions?
The reductions vary between the modern awards and do not
necessarily apply to all employees.
The changes to the affected awards (where applicable) include
reductions between the range of 25% and 50% in respect of Sunday
penalty rates and reductions of 25% in respect of public holiday
In addition to the above reductions, the Full Bench has varied
some of the penalty provisions relating to early/late night work in
the Restaurant Award and Fast Food Award.
Be aware that the reductions in penalty rates do not take
effect immediately. The changes to public holiday rates and penalty
provisions relating to early/late night work in the Restaurant
Award and Fast Food Award do not take effect until 1 July 2017 and
there is no specific date set for the Sunday penalty rates changes
which are likely to be phased in.
More information regarding the reduction in penalty rates is
likely to be released over the coming weeks.
Employers should be aware that they will not necessarily be
able to categorically reduce the applicable penalty rates for
current employees when they come into effect – particularly
where any current employees are subject to employment contracts
which provide that they are entitled to receive the old penalty
If any affected employers have a particular view or preference
regarding the phasing in of the reductions in Sunday penalty rates,
they should consider making application (directly or via their
relevant industry group) when the Commission calls for submissions
from interested parties regarding arrangements to transition in the
reduction in Sunday penalty rates.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.Madgwicks is a member
of Meritas, one of the world's largest law firm
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