Employment and Migration Blog

Sunday penalty rate changes – what you need to know

Posted by Anna Ford on 10 May 2017

Assisted by Holly Pitt

The bottom line: as it currently stands none of the proposed changes have been introduced – so no changes to hourly rates are required at this point in time!

Background – why did Sunday penalty rates come under attack?

Employer groups have been advocating for years for the reduction of penalty rates on Sundays on the grounds that penalty rates are too high and no longer reflect community standards, and, significantly, are forcing businesses to close their doors on weekends and public holidays.

What happened on 23 February 2017?

On 23 February, as part of the four yearly review of modern awards, the Fair Work Commission (FWC) handed down a landmark decision announcing that Sunday penalty rates would be reduced for those working in the retail, fast food, hospitality and pharmacy industries, and that most of the reductions would take effect from July 2017 with the remainder phased in over time.

What do the proposed changes to Sunday rates look like?  

Government Intervention

Opposition Leader Bill Shorten and Greens MP Adam Bandt have both introduced separate private member bills to parliament in an attempt to protect all current penalty rates.     

If successful, the bills would prevent the above penalty rate changes from coming into effect, and would also prevent the FWC from making future cuts to an employee’s or prospective employee’s take-home pay(including penalty rates).

What is the Labor bill proposing?

The Fair Work Amendment (Protecting Take Home Pay) Bill 2017, is the title of the bill introduced by Bill Shorten. If passed, this will amend the Fair Work Act so that the FWC would be unable to vary a modern award to reduce an employee’s or prospective employee’s take-home pay.

The bill would also mean that any decision to reduce take-home pay (including penalty rates) made on or after 22 February, 2017 would have no effect.

What is the Greens bill proposing?

The Fair Work Amendment (Protecting Weekend Pay and Penalty Rates) Bill 2017, introduced by Adam Bandt, includes similar provisions to that of Labor’s, however, it would also amend the Fair Work Act so that penalty rates in a modern award couldn’t be varied to make the penalty rate lower than that in force under the award on 1 January, 2017.

What now?

Sit tight and keep an eye on our blog for an update on further developments:

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