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Penalty rate hikes to hit retail employers

Adam Zuchetti
Adam Zuchetti
28 September 2018 2 minute readShare

Employers will be expected to fork out higher penalty rates for casual retail workers following a review of the award by the Fair Work Commission, which will take effect in the lead-up to the Christmas shopping period.

Under its four-yearly review of all industry awards, the Fair Work Commission (FWC) examined the General Retail Industry Award 2010.

As part of the review, the Australian Retailers Association together with Master Grocers Australia applied to have the penalty rates for Sunday shiftwork reduced.

Meanwhile, the Shop, Distributive and Allied Employees Association (SDA) – the retail sector union – petitioned for an increase in the penalty rates for all ordinary hours on Saturdays as well as hours worked after 6pm Monday to Friday.

The FWC examined a range of factors, including the concentration of employees within the retail sector hired under the award, the size of the businesses reliant on these awards and demographics of retail employees, as well as the Productivity Commission report into workplace relations.

It ruled a staged reduction in Sunday penalty rates over the next three years, taking the rate from 1 November to 195 per cent for full and part-time employees and 220 per cent for casuals. That will ultimately fall to 170 per cent for full and part-timers and 200 per cent for casuals from 1 July 2020.

However, it was the ruling on weekday evening and Saturday penalty rates that was most controversial.

The FWC has mandated that, under the award, casual employees will see a substantial increase in penalty rates, again under staged rises.

This will start at an additional 15 per cent for all Saturday hours and an additional 5 per cent for evening hours after 6pm, to take effect from 1 November 2018.

That will top out at a hefty 25 per cent rise for Saturday hours from 1 March 2020 and a 15 per cent rise for night hours.

The full determination, totalling 94 pages, can be found on the FWC website.

Union claims ‘win’ against low wage growth

The SDA claimed the verdict as a win for employees amid “historic low wage growth”.

“Australians need a pay rise, not a pay cut and business needs to get onboard,” the union’s national secretary, Gerard Dwyer, said.

“The Reserve Bank and federal Treasury have been clear in their assertions that historic low wage growth is a major handbrake on the Australian economy.

“This win means that casual workers covered by the Retail Award will receive casual loading on top of penalty rate loadings for weeknights and Saturdays.”

Mr Dwyer noted that under the determination by the Fair Work Commission, penalty rates will be increased for casual employees working after 6pm Monday to Friday, with a 25 per cent increase in penalty rates for ordinary Saturday hours.

“This will result in significant pay increases for over 350,000 hard-working retail employees on the award and will have important flow effects for employees on enterprise bargaining agreements right across Australia’s retail sector.”

Employers left shocked at size and timing of increase

However, according to Employsure, the move – due to come into force from 1 November 2018 – will create a headache for SMEs just as retailers gear up for the busy Christmas shopping season.

“Small business employers are feeling the pinch during the peak season and increasing consumer demand for longer operating hours before Christmas,” said Employsure senior employment relations adviser Alexandra Woods.

“Many retailers by now have already planned rosters and hired casuals before the busy wave of Christmas. Now, with this decision introduced, retailers are going to have to rethink their rostering arrangements and budgets.”

Ms Woods added: “We speak to thousands of small business owners every week who would like to see government stop making frequent changes to penalty rates and get serious about supporting small business.”

Penalty rate hikes to hit retail employers
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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