Retailers will bear the brunt of the Fair Work Commission’s recent decision to implement reductions to penalty rates over a four-year transitional period.
That’s according to leading retail organisations who have welcomed the cuts but not the timescale for implementation.
The National Retail Association ‘s CEO Dominique Lamb said she was disappointed with the long transition period.
“Retailers need a break and they need it now, as consumers are continuing to tighten their discretionary spending belts,” Lamb said.
“Retail is struggling amid soaring operating costs and increased competition so a shorter transition to reduced penalty rates would have been a welcome relief, as it would have potentially allowed them to focus on improving customer service by having more employees on the floor.
“Australian retailers are paying some of the highest wages in the world, and it’s often not viable to even open their doors on a Sunday because they can’t even cover the wages let alone turn a profit, and that doesn’t help anyone.
“This transitional period is somewhere between the SDA’s recommendations and ours, but four years is a really long time, and adds complexity to an already complex system.”
Australian Retailers Association executive director Russell Zimmerman echoed the sentiments.
“The Commission found that a reduction in penalty rates will allow retailers to extend staff working hours and increase employment across the board, therefore these sluggish arrangements will unnecessarily delay the creation of new retail jobs,” he said.
“Retailers are already operating in a tough environment, and the ARA will be working with its members and legal providers to strongly defend the decision to ensure the implementation of Public Holiday rates from 1 July 2017,” Zimmerman said.
The ARA will further challenge any attempt by the Shop, Distributive and Allied Employees Association (SDA) to defer the implementation of the Sunday penalty rates decision.
“The ARA will strongly oppose any application from the SDA for judicial review of the Sunday penalty rates decision, as this will only serve to prolong the benefits for retail employers, employees and overall industry growth.”
The Australian Industry Group was more supportive of the measures.
Innes Willox, chief executive of the Australian Industry Group described the decision as “cautious but fair”.
“While fast food businesses would have preferred the new Sunday penalty rates to be fully implemented by 1 July 2018, the FWC has decided to phase-in the new rates over two years from 1 July 2017.
“It is pleasing that the FWC has ruled out red-circling and take home pay orders which would have been a nightmare for businesses to implement. It is also pleasing that the new public holiday penalty rates will be immediately implemented from 1 July 2017,” Willox said.
Your quick guide to award rates and transition times
Fast Food Award
Full-time and part-time employees – Level 1 only
- 1 July 2017: 150% → 145%
- 1 July 2018: 145% → 135%
- 1 July 2019: 135% → 125%
Casual employees (inclusive of casual loading) – Level 1 only
- 1 July 2017: 175% → 170%
- 1 July 2018: 170% → 160%
- 1 July 2019: 160% → 150%
Retail Award
Full-time and part-time employees
- 1 July 2017: 200% → 195%
- 1 July 2018: 195% → 180%
- 1 July 2019: 180% → 165%
- 1 July 2020: 165% → 150%
Casual employees (inclusive of casual loading)
- 1 July 2017: 200% → 195%
- 1 July 2018: 195% → 185%
- 1 July 2019: 185% → 175%
Hospitality Award
Full-time and part-time employees
- 1 July 2017: 175% → 170%
- 1 July 2018: 170% → 160%
- 1 July 2019: 160% → 150%
Pharmacy Award
Full-time and part-time employees
- 1 July 2017: 200% → 195%
- 1 July 2018: 195% → 180%
- 1 July 2019: 180% → 165%
- 1 July 2020: 165% → 150%
Casual employees (inclusive of casual loading)
- 1 July 2017: 225% → 220%
- 1 July 2018: 220% → 205%
- 1 July 2019: 205% → 190%
- 1 July 2020: 190% → 175%
For the full summary of the decision, visit www.fwc.gov.au.