‘Historic’ penalty rates decision a win for business

The Fair Work Commission has released the results of its four yearly review of modern awards, with something of a surprise decision that has been applauded by SME advocates.

Hospitality and fast food business, retailers, as well as pharmacies will all see their wage bills reduced, with Sunday and public holiday penalty rates cut across these sectors.

The cuts are not, however, uniform across all employee types.

In a statement by HR Assured issued immediately after the verdict was announced, HR Assured welcomed the cuts it labelled as “historic”, which look as follows:

Retail

• Sunday penalties will be reduced from 200 per cent to 150 per cent for permanent employees, and to 175 per cent for casuals.

HospitalityPair of scissors cutting a percentage symbol

• Permanent employees will have their Sunday penalty rates cut from 175 per cent to 150 per cent, although there will be no change for casuals.

Fast Food

• Level 1 permanent employees will see penalty rates reduced from 150 per cent to 125 per cent; and a similar cut will be made to casual penalty rates from 175 per cent to 150 per cent.

Pharmacy

• Penalty rate cuts apply only to employees working between 7am and 9pm. Rates will decrease from 200 per cent to 150 per cent for permanent employees, and to 175 per cent for casuals.

“The decision also included changes to public holiday penalty rates. The significance of this outcome cannot be overstated,” said FCB, parent company of HR Assured.

Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), also welcomed the penalty rate reductions, saying it will help businesses to operate for longer and better meet customer demand.

“Today’s decision by the Fair Work Commission to reduce rates in the retail, hospitality and fast food industries is a win for common sense that will ultimately boost jobs and stimulate growth across the economy,” she said.

“While it wasn’t quite to the extent proposed by some, it’s certainly a big step in the right direction; it will be important now for a transition period to be put in place to ensure employers and employees are fully across the changes.”

According Ms Carnell, smaller businesses are often forced to close earlier than they would like simply because of ballooning wages bills on weekends.

“Let’s not forget, the big players in this space – the supermarkets, the big fast food chains – have already traded away penalty rates in their Enterprise Bargaining Agreements (EBAs), so the only people who have been forced to pay the higher wages on Sundays are mum and dad small business owners,” she said.

“Latest figures show the number of small businesses in Australia is on the rise; so too the number of people they’re employing. If we want to see this trend continue, if we want to see small businesses grow, they’ve got to be able to make a profit, and changing weekend wage settings in the retail, hospitality and fast food sectors will give them a fighting chance to do just that.”

Does your business operate within these sectors? If so, comment below or drop us a line at This email address is being protected from spambots. You need JavaScript enabled to view it. to outline exactly what these changes will mean for you and your business!

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