Employment Law Update

Penalty Rates in the Hospitality Industry

There has been recent commentary from the Government suggesting that Sunday penalty rates in the hospitality industry may be up for review in the future.

We summarise below some of the key recent developments in this area.

In August 2014, the Full Bench of the Fair Work Commission (FWC) accepted that Sunday penalty rates may limit employment in the restaurant sector, particularly for owner-operators working on Sundays in preference to engaging staff.

The FWC varied the Restaurant Industry Award 2010. Casual employees at the lower classification levels are now paid at a total loading of 50% for Sunday work. That is, the standard 25% casual loading plus an additional 25% (instead of 50%) in recognition of work on Sundays.

In August 2015, the Productivity Commission (PC) released its draft report in relation to the Australian workplace relations framework. The PC concluded that Sunday penalty rates for hospitality, entertainment and retail should be aligned with Saturday rates.   The final report is expected in December 2015.

In September 2015, both the Prime Minister and a key cabinet minister made public statements indicating that Sunday penalty rates would be looked at by the Government.

The issue of penalty rates is contentious and politically sensitive.

It remains to be seen whether the Government commits to changes to Sunday penalty rates and is re-elected on that platform. Control of the Senate will also be necessary.

Please do not hesitate to contact Tom Read for specific advice on employment related issues including:

  • Employment contracts
  • Redundancy
  • Employment disputes including termination, unfair dismissal, general protections claims, entitlement disputes, restraint of trade and misappropriation of confidential information
  • Transfer of business issues