Snap Shot of IR Penalty Rates Updates

Penalty Rates and Loadings

On Thursday 23 February, 2017 the Fair Work Commission handed down its long awaited decision on penalty rates.

The decision reduces the overtime payments to staff employed in the Hospitality, Retail, Fast-food and Pharmacy industries.

The decision has determined that the penalty rates in these industries will be changed to:

The decision will come into effect in relation to public holiday rates on July 1, 2017 however, the reductions to penalty rates will be through transitional arrangements that are yet to be set.

Existing enterprise agreements will remain in their current form and are not subject to these changes in penalty rates and loadings until they are replaced, varied or terminated.

The Registered and Licensed Clubs Award and the Restaurant Industry Award were excluded from the changes made to the Sunday penalty rates decision and they have been invited to make further submissions to the FWC, however there were some changes made to the early and late work penalty payments covered by these two awards as described below which will come into effect in early March 2017.

Early / late-night work loadings

Fast Food Award

  • Early work loading of 15% will apply between the hours of midnight and 6am (the Fast Food Award currently only refers to application of the loading for hours of work ‘after midnight’)
  • Late-night work loading of 10% will apply between the hours of 10pm and midnight, instead of 9pm and midnight

Restaurant Award

  • Early work loading of 15% will apply between the hours of midnight and 6am, instead of midnight and 7am

 The Labor Party, Unions and the ACTU are opposed to the changes and they are currently seeking to convince the Government to intervene and overturn the decision but they are unlikely to succeed.

Despite the FWC’s comments on expansion of these amended penalty rates other industries may also attempt to flow this decision on into their industries so watch this space.

The Australian Building & Construction Commission (ABCC)

The new commission has commenced operations as the governing body for industrial issues in the building and construction industry.

The ABCC has implemented new compliance requirements for organisations with Enterprise Bargaining Agreements who want to tender for government projects.

Businesses who do not have EBA’s no longer require a Letter of Compliance and use a Self-Declaration A Form.

This form and the Letter of Compliance requirements and process are available on the ABCC website at www.abcc.gov.au.

Pizza Hut joins 7-Eleven in Underpayment of Wages Investigations

The government is considering introducing legislation to crack down on the $170 billion franchise industry across Australia after 7-Eleven and Pizza Hut have been found to have been in breach of the Fair Work Act in regard to the payment of wages to their employees.

7-Eleven has already repaid $26 million to its employees but not all claims have been settled to date.

The government’s new legislation will include new offence provisions to target head office and parent companies which fail to deal with exploitation by their franchisees.

Written by Leigh Bernhardt

Industrial Relations Specialist – FAHRI, PCArb, MIAMA, JP (Qual) QCAT Qld