FCB & ARA achieve historic reduction in Sunday penalty rates

A Full Bench of the Fair Work Commission this morning issued its decision in the Penalty Rates Common Issue proceedings.

FCB, the team behind HR Assured, prepared and conducted the case on behalf of the Australian Retailers Association (ARA), and the wider retail industry, seeking a reduction in the Sunday penalty rate under the General Retail Industry Award 2010 (GRIA) from its current level of an additional 100%.  In the decision, the Full Bench found that FCB had made the case for change, and has determined that the Sunday penalty rate under the GRIA will be reduced to an additional 50% only.

The Full Bench placed emphasis on the evidence presented by FCB that retailers would provide more employment opportunities, both through additional hours and new employment, if the penalty was reduced, and that retail employees were willing to work for a reduced penalty rate. In providing its decision, the Full Bench stated, amongst other things, that:

  1. that the current penalty rate structure does not achieve the modern award objective of a fair and relevant safety net;
  2. a reduction in penalties rates will likely increase employment growth, trading hours and service levels;
  3. the changes made will create greater consistency in penalty structures across awards; and
  4. the ARA’s witness evidence was clear and presented a persuasive argument for change.

In making this decision the FWC made the following changes to the penalty rate structure in the following awards:


Retail Award:

  • Permanent employees Sunday penalties will be reduced from 200% to 150%; and
  • Casual employees Sunday penalties will be reduced from 200% to 175%.

Hospitality Award:

  • Permanent employees Sunday penalties will be reduced from 175% to 150%; and
  • No changes for casuals.

Fast Food Award:

  • Level 1 permanent employees Sunday penalties will be reduced from 150% to 125%; and
  • Level 1 casual employees Sunday penalties will be reduced from 175% to 150%.

Pharmacy Award:

  • Permanent employees (7am – 9pm only) Sunday penalties will be reduced from 200% to 150%; and
  • Casual employees (7am – 9pm only) Sunday penalties will be reduced from 200% to 175%.

The decision also included changes to public holiday penalty rates. The significance of this outcome cannot be overstated.

The Full Bench, in delivering the decision, has also outlined a process for the implementation of these reductions and has called for submissions in relation to various aspects of this. FCB will be working with the ARA and retailers to address the transitional framework.

We also expect that this will not be the last we hear on the matter.  There is every likelihood that the union movement will launch an appeal against the decision.

FCB is in the process of reviewing the full text of the decision and will provide a more detailed summary later today.