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Court strikes down penalty rates appeal

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Court strikes down penalty rates appeal

Gavel, judgement, verdict

The Federal Court has handed down its verdict on the weekend penalty rate cuts, which were challenged by a prominent trade union.

In February this year, the Fair Work Commission announced plans to cut Sunday penalty rates for employees working under retail, hospitality, fast food and pharmacy awards, which was widely lauded by the business community as a step towards improving industrial relations restrictions for SMEs.

However a shadow was cast over the cuts after the Shop, Distributive and Allied Employees Association challenged the validity of the cuts in the Federal Court.

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Today the Federal Court of Australia struck down the union’s challenge, stating that suggestions the Fair Work Commission had gone beyond its remit by cutting rates were invalid and that all of its grounds of challenge should be dismissed.

“Small business operators will be relieved at this decision, which levels the playing field in competition against big business,” said Australian Small Business and Family Enterprise Ombudsman Kate Carnell in response to the verdict.

“Big business and unions have made deals in the past through enterprise agreements which traded penalty rates for union membership and higher base rates [however] small businesses don’t have the capacity to negotiate enterprise agreements and continue to grapple with the most complex award system in the world.

She added: “People’s lifestyles and expectations have changed over the past 20 years. Fewer people go to church and many people want to work and shop on Sundays and public holidays.”

Adam Zuchetti

Adam Zuchetti

Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016. 

The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Email Adam at This email address is being protected from spambots. You need JavaScript enabled to view it.

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