The Fair Work Commission (FWC) has handed down two decisions which will have implications for employers from 1 July 2017: the annual wage review which determines minimum award rates and the transitional arrangements to roll out changes to penalty rates.

Annual Wage Review

To the surprise of many, the FWC has ordered that minimum award rates be increased by 3.3% from 1 July 2017.  

The Australian Council of Trade Unions had called for a 6.7% increase while employer groups such as the Australian Chamber of Commerce and Industry and the Australian Industry Group proposed modest increases of 1.2% and 1.5% respectively.

Employers who pay employees an annualised salary (if allowed by the applicable award) or have individual flexibility agreements should review remuneration levels to ensure the remuneration is appropriate and satisfies award entitlements in view of the rate increase.
 
Penalty Rates Decision – Transitional Arrangements

The FWC has also decided the transition timetable for the penalty rate cuts to the following modern awards:

  • General Retail Industry Award 2010;
  • Hospitality Industry (General) Award 2010;
  • Restaurant Industry Award 2010;
  • Fast Food Industry Award 2010; and
  • Pharmacy Industry Award 2010.

Public Holiday Penalty Rates

In relation to the Public Holiday penalty rates, the FWC confirmed its decision that the reduced Public Holiday penalty rate provisions in the Retail, Hospitality, Restaurant, Fast Food and Pharmacy Awards will take effect on 1 July 2017, without any transitional arrangements. 

A summary of the current and amended Public Holiday rates is below:

Award

Current Public Holiday Rates

New Public Holiday Rates to take effect from 1 July 2017

General Retail Industry Award 2010

250% (FT/PT)

275% (Casual*)

225% (FT/PT)

250% (Casual*)

Hospitality Industry (General) Award 2010

250% (FT/PT)

275% (Casual*)

225% (FT/PT)

250% (Casual*)

Restaurant Industry Award 2010

250% (FT/PT)

250% (Casual*)

225% (FT/PT)

250% (Casual*)

Fast Food Industry Award 2010

250% (FT/PT)

275% (Casual*)

225% (FT/PT)

250% (Casual*)

Pharmacy Industry Award 2010

250% (FT/PT)

275% (Casual*)

225% (FT/PT)

250% (Casual*)

*inclusive of any casual loading

Sunday Penalty Rates

Reductions to Sunday penalties in the Retail, Fast Food, Hospitality and Pharmacy Award will be phased in from 1 July each year over the next 3–4 years.

A summary of the transitional arrangements for each of these awards is set out below.

Award

Date

Full-time and part-time employees

Casual employees (inclusive of casual loading)

Hospitality Industry (General) Award 2010

1 July 2017

175% to 170%

No change

1 July 2018

170% to 160%

No change

1 July 2019

160% to 150%

No change

Fast Food Industry Award 2010

1 July 2017

150% to 145%*

175% to 170%*

1 July 2018

145% to 135%*

170% to 160%*

1 July 2019

135% to 125%*

160% to 150%*

General Retail Industry Award 2010

1 July 2017

200% to 195%

200% to 195%

1 July 2018

195% to 180%

195% to 185%

1 July 2019

180% to 165%

185% to 175%

1 July 2020

165% to 150%

No change

Pharmacy Industry Award 2010

1 July 2017

200% to 195%

225% to 220%

1 July 2018

195% to 180%

220% to 205%

1 July 2019

180% to 165%

205% to 190%

1 July 2020

165% to 150%

190% to 175%

*Level 1 employees only

If you have any questions about awards, penalty rate changes or any other employment law matter, please contact:

Jim Rutherford
Principal
T 03 5226 8579
E jrutherford@ha.legal

Sonia McCabe
Senior Associate
T 03 5226 8558
E smccabe@ha.legal

Jenni Walker
Lawyer
T 03 5226 8577
E jwalker@ha.legal