Penalty rates reduced

The Fair Work Commission today handed down its ruling in AM2014/305 'the Penalty Rates Case'.

The decision means that penalty rates for full and part time workers in the hospitality industry will be reduced from 175% to 150% of the standard wage. Casual staff are not affected by the decision.

The matter has been on foot since 2014 and has received submission from small business, the hospitality industry, and the ACTU among others.

The hospitality industry and small business submitted that a reduction in rates would benefit workers because it would allow properties to hire more staff, and give more venues the opportunity to open on Sundays . To some extent, the Productivity Commission agreed; arguing in its submission that penalty rates "frustrated employment chances for the unemployed".

It was also generally submitted that penalty rates were outdated and no longer reflected modern norms of consumer expectation in a 24/7 world. Additionally, a percentage of people employed in hospitality are students, and Sunday work for those employees does not represent a major inconvenience.

Against this were submissions made on behalf of workers by the ACTU and others. those submissions fairly argued that there was no guarantee that employees would be compensated with additional hours, or that venues would hire more staff. Further, many people who worked on Sundays were employed as casuals who would now be less favoured over (cheaper) full and part time staff.

Submissions made for and against both contained relevant issues. But the ability to offer full and part time employees more flexible hours has long been shackled by penalty rates, which have made it more convenient to roster casuals on Sundays and public holidays.

The decision will help bring a greater degree of certainty and flexibility to full and part time employees which, in turn, will enhance employee loyalty and satisfaction.