Tens of thousands of Illawarra workers doing Sunday shifts will have their pay rates slashed come July following a Fair Work Commission (FWC) ruling that’s been dubbed a “massive backwards step” for the region’s lowest-paid employees.
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The national workplace umpire announced on Thursday that existing penalty rates for workers in the retail, fast food, hospitality and pharmacy industries would be cut.
In some cases, the penalties are as much as “double time”.
The changes have dealt a blow to workers, many of whom say the extra money generated by penalty rates helps them make ends meet.
“This is a massive backwards step for the lowest-paid workers in this country, and the hospitality and service economy,” South Coast Labour Council secretary Arthur Rorris said.
“If one of the biggest problems we have in this country is wage growth that is too low ... to boost economic activity, then the dumbest thing you can do is to cut wages even further.”
Mr Rorris said the changes would affect tens of thousands of the region’s workers.
Among those workers was 20-year-old University of Wollongong student Sage Fowler, who works Sunday shifts as part of her job in the hospitality industry.
“I always try and get Sundays because I know I’m going to get $35 an hour, so I’m pretty annoyed they’re cutting it,” Ms Fowler said, adding the extra cash helped with the costs of living.
“I’m not really getting supported by my parents so it’s kinda just me now [and] that little bit of money actually really helps.”
Rebecca Brown, 26, also works in hospitality and said the extra money from penalty rates helped her cover rent.
“It just helps out because usually a Sunday shift’s only four hours,” Ms Brown, from Wollongong, said.
Illawarra Business Chamber executive director Chris Lamont said the FWC decision presented a “more affordable and pragmatic wage system”.
“The commission has ruled based on the significant feedback that penalty rates no longer reflect community standards and have forced many businesses to close the doors on weekends and public holidays,” Mr Lamont said.
The move was in line with the Productivity Commission’s 2015 recommendation to reduce Sunday rates in line with Saturdays, he said.
“We now operate in a 24/7, seven-day-a-week economy, where many workers see no difference in working Sundays compared to Saturdays,” he said.
Member for Whitlam Stephen Jones was among the region’s Labor MPs who slammed the cuts.
“The Fair Work Commission says Sundays aren’t special anymore, but they don’t work Sundays,” Mr Jones said.
Cunningham MP Sharon Bird Sharon Bird said the FWC decision would “put even more pressure on families and be a big blow to young workers who are trying to earn an income while undertaking study or training”.
“Slashing penalty rates means that workers will have less money to spend and will find it harder to make ends meet,” Ms Bird said.
CHANGES AT A GLANCE
Full-time and part-time workers in retail will have their Sunday penalty rates dropped from 200 per cent to 150 per cent of their standard hourly rate, while casuals will go from 200 per cent to 175 per cent.
Hospitality employees will face a reduction in Sunday pay from 175 per cent to 150 per cent, while casual hospitality workers' pay will remain unchanged.
Fast-food employees' Sunday rates will go from 150 per cent to 125 per cent for full-time and part-time staff, and casuals will go from 175 per cent to 150 per cent.
Holiday penalty rates for full-time and part-time employees in hospitality and retail will also be slashed from 250 per cent, or "double-time and a half", to 225 per cent.
WHO GAINS, AND WHO WILL BE HIT THE HARDEST?
Who will gain the most from the changes, and who will be the hardest hit? The penalty rates decision in a nutshell.
Why were penalty rates reviewed?
Hospitality and retail sectors made applications to vary penalty rate provisions as part of the Fair Work Commission's four-yearly review of awards.
Which awards were reviewed?
Fast food, retail, hospitality, pharmacy, clubs and restaurants.
What did the Fair Work Commission base its decision on?
The full bench spent 39 days hearing evidence from 143 witnesses. It also received 5900 submissions.
Which weekend penalty rates have changed?
Saturday rates in the fast food, hospitality, restaurant and retail sectors will not change and were found to be fair.
Sunday rates for retail, fast food and some hospitality industries will be reduced by 25 to 50 percentage points.
The Fair Work Commission said Sunday rates should generally be more than Saturday rates, but not as high as they were in the past.
Who will gain the most from the changes?
Business groups have welcomed the cuts saying they will help keep businesses open on Sundays and help employ more staff.
Big retailers including JB Hi-Fi and Myer will be among those to benefit most from the changes.
The Federal Government will be under less pressure from industry groups to intervene.
Unions, the ALP and Greens, on the other hand, will now push for cuts to penalty rates to be overruled by legislation.
Who will be hardest hit by changes to Sunday penalty rates?
Retail workers will take the biggest hit, while casual workers in hospitality will keep their existing penalty rates.
Retail workers (full-time and part-time) will see their Sunday penalty rates cut from 200 per cent (double time) to 150 per cent (time and a half). The rates for casuals will fall from 200 per cent to 175 per cent.
Fast food outlets will cut Sunday penalty rates cut from 150 per cent to 125 per cent for full-time and part-time workers.
Hospitality workers will see their Sunday penalty rates reduced from 175 per cent to 150 per cent, but there will be no change in rates for casuals.
Sunday penalty rates for workers in restaurants and licensed clubs will not change.
Workers in pharmacies will see their Sunday penalty rates cut between the hours of 7am to 9pm from 200 per cent to 150 per cent. Rates for casual employees will fall from 200 per cent to 175 per cent.
- Anna Patty