Loaded penalty rates approved by FWC

The Fair Work Commission (FWC) has approved loaded penalty rates for the hospitality industry.

Pubs and hotels can now roll penalty rates – weekend and overtime – into a single higher rate for senior permanent staff, simplifying workplace administration for smaller businesses.

The measure was approved by a full bench headed by Justice Ian Ross following a submission made to the Commission by the then Minister for Industrial Relations, Christian Porter.

Mr Porter expressed the federal government’s view that given the extraordinary impact of the pandemic, it is in Australia’s best economic interest for the FWC to “use its powers … to undertake a process to ensure several priority modern awards in sectors hardest hit by the pandemic be amended.’ This included the hospitality award.

The FWC determined that hospitality’s higher-paid workers would not be negatively impacted by the award changes.

“It seems to us that the quantum of loaded rates and the loaded rate parameters ensure that workers on Loaded Rates Arrangements are paid the same or more than they would have been paid if the loaded rate did not apply,” said Mr Ross, Mr Clancy and Ms Bissett in a joint statement from the Commission.

The loaded rates will apply to full-time workers paid at level three and above rates and include five tiers of rates ranging from 10.2 per cent to 31.5 per cent above the award rate.

Employers paying these new loaded rates will not be required to pay some staff leave entitlements such as weekend penalty rates but must still pay overtime.

It does not apply to junior employees and does not require agreement.

The proposed changes were drafted in consultation with the Australian Hotels Association (AHA) and the United Workers Union.

AHA CEO Stephen Ferguson said this is an excellent outcome for Australia’s hotels and hospitality businesses, 65 per cent of which are family-owned and operated.

“The overwhelming majority of hospitality employers do the right thing, but not all businesses have the resources to employ dedicated workplace relations teams.”

“Initiatives such as loaded rates are critical in preventing unintended breaches of workplace laws.”

He said that the decision will ensure businesses can “spend more time running their hotels, bars, taverns, pubs and restaurants and less time pushing paper – this directly assists with job creation”.

The amended awarded came into effect on Friday, 3 September.