FWC Rules Penalty Rates Will Be Reduced for Hospitality Workers

The Fair Work Commission (FWC) has ruled that Sunday and public holiday rates will be reduced for full-time and part-time workers across the hospitality, retail and fast food industries.

In the hospitality industry, Sunday pay rates for full-time and part-time workers will be reduced from 175 per cent to 150 per cent. Public holiday rates for full-time and part-time hospitality workers will be reduced from 250 per cent to 225 per cent; for casual workers the pay rate will be reduced from 275 per cent to 250 per cent.

FWC President Iain Ross said the decision to cut penalty rates may lead to increased trading hours and improved services on Sundays and public holidays, and an increase in overall hours for employees.

The Australian Council of Trade Unions (ACTU) however, said the cuts would result in a loss of up to $6,000 per year for some workers, stating that “No worker will be better off as a result of this decision.”

“Families across Australia rely on penalty rates to put food on the table every week and to keep households afloat in difficult times,” said ACTU President Ged Kearney.

Hospitality workers were notably concerned with the decision, many taking to social media platforms Facebook and Twitter overnight, voicing their concerns over reduced pay.

FWC acknowledged the immediate financial burden the cuts may cause for those reliant on Sunday rates, offering planned transitional arrangements.

“Many of these employees earn just enough to cover weekly living expenses. Saving money is difficult and unexpected expenses produce considerable financial distress,” said Ross.
 
“The immediate implementation of the variations to penalty rates would inevitably cause some hardship to the employees affected, particularly those who work on Sundays.

“We have concluded that appropriate transitional arrangements are necessary to mitigate the hardship for employees who work on Sundays,” but have not yet “reached a concluded view as to the form of those arrangements.” 

The Australian Hotels Association (AHA) has regarded the Commission’s decision as a win for the public, stating the reduction on penalty rates would allow hospitality venues to open more often on Sunday and public holidays.

Though supportive of most penalty rate cuts, AHA CEO Bradley Woods said the positives were not as far-reaching as he’d hoped. 

“The decision does not go far enough to deliver changes that will see significant employment growth opportunities,” he said, with regards to the fact that casual worker rates were reduced by 25 per cent and not the 100 per cent the association had hoped for.

“Whilst we did not get what we asked for, it is a step in the right direction. Along with opening for additional hours to service our hospitality economy, even more jobs could be created. 

“Our case challenged the status quo, which saw cost-prohibitive penalty rates on weekends and public holidays.

“The changes will encourage our members to offer more shifts for workers and longer hours for customers."

Further information on the the penalty rates can be found here.