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Alert - Fair Work Commission Significant Decision

The Fair Work Commission (FWC) has announced reductions in Sunday and public holiday penalty rates in the retail, fast food and hospitality industries.   

As a business you do not need to make any changes yet.  HR Advice Online will advise when changes are required to be implemented – until then the following is for your information.

Various employer bodies made applications to FWC to vary the penalty rates provisions in a number of modern awards in the Hospitality and Retail sectors. These applications relating to weekend and public holiday penalty rates were heard together.  The decision represents the culmination of more than two years of work hearing evidence and submissions.

In making its decision, the Full Bench accepted that the imposition of a penalty rate may have the effect of deterring employers from scheduling work at specified times or on certain days.  Justice Ross said the FWC made the call to reduce Sunday and public holiday rates because they were not a “fair and relevant” safety net and agreed with employers that reducing rates is “likely to be some positive employment effects” such as increased trading hours, increase in the level and range of services, and increase in overall hours of work.  It was acknowledged the changes would cause hardship to employees affected.

FWC also reviewed Saturday rates but decided against any reductions.

The modern awards which are dealt with in this decision are:

§  Fast Food Industry Award 2010 (the Fast Food Award)

§  General Retail Industry Award 2010 (the Retail Award)

§  Hospitality Industry (General) Award 2010 (the Hospitality Award)

§  Pharmacy Industry Award 2010 (the Pharmacy Award)

§  Registered and Licensed Clubs Award 2010 (the Clubs Award)

§  Restaurant Industry Award 2010 (the Restaurant Award)


Proposed changes to Sunday penalty rates in the Hospitality and Retail Awards


Sunday Penalty Rate

Hospitality Award
Full-time and part-time employees:

(no change for casuals)


175% 150%

Fast Food Award

(Level 1 employees only)

Full-time and part-time employees:

Casual employees:



150% 125%

175% 150%


Retail Award

Full-time and part-time employees:

Casual employees:



200% 150%

200% 175%

Pharmacy Award

(7.00 am – 9.00 pm only)

Full-time and part-time employees: Casual employees:




200% 150%

200% 175%


Public Holidays

The FWC also decided to reduce the public holiday penalty rates from 250% to 225% across the hospitality, restaurant, retail, fast food and pharmacy industries for full time and part time employees and from 275% to 250% for casuals.

The changes to public holiday penalty rates will take effect on 1 July 2017.


What does this mean for businesses?

Employees covered by Hospitality and Retail Awards will continue to receive penalty rates, but they will be reduced.  The FWC has not reached a concluded view as to the form of the transitional arrangements and proposes to seek submissions from interested parties as to that issue.

The FWC did not suggest that these changes will apply uniformly across all hospitality and retail businesses. The actual impact of a reduction in Sunday and public holiday penalty rates will depend on the circumstances applying to individual businesses.


What do you need to do?

If you are in these industry sectors the only change that has effect is the public holiday rates and that is effective from the 1st July 2017.

Watch this space as there will be a transitional arrangement handed down by the FWC at some point in the future and we will provide further advice about how to go about implementing the change. 



Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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