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Alert - Penalty Rates Decision Upheld

Earlier this year, the Fair Work Commission announced that changes were being phased in to reduce the Sunday penalty rates for employees who were engaged under the retail, hospitality, fast food and pharmacy awards. At the time that this announcement was made, both the Shop, Distributive and Allied Employees Association and United Voice challenged the validity of this decision in the Federal Court.

It was claimed by both unions that the Fair Work Commission had failed to meet its legal obligations when it had made the decision to reduce the penalty rates which would impact hundreds of Australian employees. In contrast, employer groups supported the decision and felt that the Commission had properly balanced the interests of both employers and employees.

Following a three day hearing, it was announced this week that a full Federal Court has unanimously dismissed the Shop, Distributive and Allied Employees Association and United Voice’s application to overturn the Fair Work Commission’s penalty rates decision.

 In making its determination, the Federal Court held that the Fair Work Commission had conducted its assessment of the appropriate Sunday and public holiday penalty rates in the applicable awards in an appropriate manner, and that the determinations had not been impacted by jurisdictional error.

 While the Unions have indicated that they will continue to challenge what they consider to be a harsh and unfair reduction in pay, the penalty rate changes will continue to be phased in in accordance with Fair Work timetable.

Details of this timetable can be found in the Resources section of our website.

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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