How was the FWC penalty decision made?

The Fair Work Commission (‘FWC’) handed down a decision to make amendments to a number of awards that will reduce the weekend penalty rates paid to employees working in the hospitality, fast food, retail and pharmaceutical industries.
To find out who is affected by this change to penalty rates, see our blog post on this topic here.
In this blog post, Emily Shoemark and Caitlin Meers explain this decision.

How was the decision made?

Under section 156 of the Fair Work Act 2009 (Cth) the FWC reviews all modern awards every 4 years. As part of this review process, the FWC receives and considers evidence from all relevant award and industry sectors to assist their review, including government reports, statistical data and social commentary material. This allows the FWC to consider the economic and social impact of proposed changes to the awards, including any effect those changes would have on business owners, industry groups and individual employees.
Over a number of days between September and December 2015 the FWC heard evidence from 143 employers and employees from across Australia to consider the proposed changes to penalty rates. After that hearing, the FWC received almost 6000 further contributions from employees and employers in the relevant industries.

Why were the penalty rates reduced?

Historically, the FWC imposed penalty rates to both deter employers from asking their staff to work outside of standard Monday to Friday hours, and to compensate employees for working outside ‘normal hours’.
Amongst a number of considerations, the FWC concluded that while employees should continue to be compensated for working outside ‘normal hours’, employers should no longer be deterred from scheduling work, or operating hours, outside ‘normal’ working hours by the imposition of penalty rates.

Where can I find the full decision?

You can find the full decision here.

What now?

If you have any questions or concerns about the FWC penalty decision and your penalty rate entitlements or any other employment issues, please contact Emily Shoemark and Caitlin Meers in our Employment Team on (02) 6285 8000 or by email to discuss. You can find out more about our employment law work here.