Penalty rate cuts set to boost business

A reduction in Sunday penalty rates will be phased in over the next three to four years for the retail and hospitality sectors starting July 1, the Fair Work Commission has confirmed.

In February, the Commission handed down a historic decision that it would reduce Sunday and public holiday penalty rates for the retail and hospitality industry awards. 

In all award categories there will be a five per cent drop in Sunday penalty rates paid from July 1, with bigger annual drops until July 2019 and 2020.

The full public holiday penalty rate cuts will take effect from this July.

The Commission said while they recognised the decision would increase trading hours and provide more hours of work for employees, it was concerned about the impact on existing workers and the short notice of the change.

CCI and other employer associations sought a short transitional arrangement, while unions asked the FWC to reconsider its decision and quarantine existing employees from any reduction in pay.

The Commission rejected the union’s claims, saying that preserving the current penalties for existing staff could create conflict between employees and would be difficult to implement.

CCI welcomes the Commission’s announcement and says business could look forward to a boost in trade on next year’s WA Day.

CCI Director of Advocacy Cath Langmead says the implementation schedule would give business owners much-needed certainty that the full suite of penalty rates changes would go ahead as announced.

“The WA business community welcomes today’s reaffirmation from the Fair Work Commission that reduced penalty rates will be implemented for the retail and hospitality sectors as planned,” she says.

“These changes should see increased trade on WA Day next year, which will mean more employment opportunities for workers and more money spent in the economy.

“Reducing penalty rates on Sundays and Public Holidays will allow stores to open longer and ensure business owners can offer greater hours to younger staff, rather than working in the business themselves – with WA youth unemployment at 14.7 per cent, this is a significant win for young West Australians looking to enter the workforce.”

Langmead says CCI members have always said exorbitant penalty rates on Sundays and Public Holidays held their businesses back.

“WA small businesses say inflated rates on these days stop them employing more staff and opening their doors for customers, which is bad for workers, patrons and the economy overall,” she says.

“CCI has continually called for a reduction in Sunday and Public Holiday penalty rates so we are pleased to see today’s announcement from the Fair Work Commission that the previously flagged changes will go ahead, which will boost economic activity and create more employment opportunities for workers.”

Final orders will be issued within the next couple of weeks.

►Need further information or have a question about the decision? Contact CCI’s Employee Relations Advice Centre today on 9365 7660 or\

Sunday penalty rates 1

Sunday penalty rates 2

Public holiday rates