UNION groups have warned some workers could lose up to $6000 a year after the Fair Work Commission agreed to slash Sunday and public holiday penalty rates for hospitality, restaurant, fast food, retail and pharmacy workers.

Up to one million workers across those industries will have their penalty rates cut by 25 to 50 per cent after the FWC handed down its long-awaited decision on Thursday.

Retail and business groups had been leading the case to reduce Sunday penalty rates from double time (200 per cent) to time-and-a-half (150 per cent), in line with Saturday penalty rates.

Fulltime and part-time hospitality workers will have Sunday rates slashed from 175 per cent to 150 per cent. Sunday rates for casuals will remain at 175 per cent.

Fulltime and part-time level one fast-food workers will have Sunday penalty rates reduced from 150 per cent to 125 per cent, but level two and three employees will stay at 150 per cent.

Fulltime and part-time retail workers will have Sunday rates reduced from 200 per cent to 150 per cent, while casuals will be reduced from 200 per cent to 175 per cent.

Union members protest the scrapping for Sunday penalty rates. Picture: Darren England
Union members protest the scrapping for Sunday penalty rates. Picture: Darren England

For pharmacy workers, Sunday rates for work between 7am and 9pm will be reduced from 200 per cent to 150 per cent for fulltime and part-time, while casuals will be reduced from 200 per cent to 175 per cent.

Public holiday rates have also been cut from 250 per cent to 225 per cent for fulltime and part-time hospitality, restaurant, retail, fast-food, and pharmacy workers. Casuals in those industries, except for restaurants, will have their public holiday rates cut from 275 per cent to 250 per cent.

Changes to public holiday penalty rates will take effect on 1 July 2017, and the variation of the early and late-night work loadings in restaurants and fast food will take effect in late March 2017.

In its decision, the FWC said existing Sunday penalty rates in the Hospitality, Fast Food, Retail and Pharmacy Awards "do not achieve the modern awards objective, as they do not provide a fair and relevant minimum safety net".

"[For] many workers, Sunday work has a higher level of disutility than Saturday work, though the extent of the disutility is much less than in times past," the FWC said.

On the decision to keep existing Sunday penalty rates for level two and three fast-food employees, the FWC said such employees "are, generally speaking, regarded as 'career' employees with the major chains".

FWC president Iain Ross said there would be a transitional period to mitigate hardship caused by the changes to Sunday rates. "Many of these employees earn just enough to cover weekly living expenses, saving money is difficult and unexpected expenses produce considerable financial distress," he said.

"The immediate implementation of the variations to Sunday 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 caused to employees who work on Sundays.

"We have not reached a view as to the form of those arrangements."

The reform was one of a number of workplace recommendations made by the Productivity Commission last year. The FWC had been considering bids from business and employer groups to lower Sunday rates since 2015.

A decision was expected at the end of last year but repeatedly delayed.

Australian Retailers Association executive director Russell Zimmerman said reducing Sunday rates would increase retail growth and reduce unemployment. "With retailers currently paying employees double time on Sundays, many retailers are forced to close their doors on this day, impeding on growth in the retail sector," Mr Zimmerman said.

"Reducing Sunday rates from double time to time and a half will give employers approximately 4-5 per cent reduction on wages which they will be able to reinvest in employing more staff, increasing employment in the retail industry."

ACTU president Ged Kearney said the decision would give almost one million Australian workers a huge pay cut. "No worker will be better off as a result of this decision," she said.

"Retail, fast food, pharmacy and hospitality workers work extraordinary hours and deserve to be compensated for working on weekends and late nights when the vast majority of the Australian workforce does not.

"Families across Australia rely on penalty rates to put food on the table every week and to keep households afloat in difficult times.

"This decision now leaves the door open for pay cuts for all Australians who rely on penalty rates and public holiday pay to support themselves and their families, including nurses and all other frontline emergency service workers."

Ms Kearney described the decision as a "game changer for industrial relations in Australia". "The independent umpire makes decisions based on the rules they are given," she said. "These rules are contained in our laws. We need the rules to change so penalty rates cannot be cut and our parliament must act now to protect working people."

Earlier, Prime Malcolm Turnbull said he would accept the decision of the independent umpire while Labor remained concerned it came at the wrong time for working families.

Labor workplace spokesman Brendan O'Connor warned pay packets are already under stress, growing at a record-low rate of 1.9 per cent. Mr O'Connor said instead of knuckling down to tackle the problem, the Prime Minister wanted to abolish or cut penalty rates.

In the December quarter, private sector seasonally adjusted wages grew 0.4 per cent. In the public sector, wages did little better, growing 0.6 per cent for the quarter. Annual wages growth has now been flat or falling since June 2014.

Business groups said the commission must balance the interests of employed people with those seeking work, as well as business operators and consumers. They argued adjusting penalty rates would allow small businesses to offer more work and better meet the needs of customers.

News Corp Australia

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