The Fair Work Commission (FWC) has reduced Sunday and Public Holiday penalty rates in the fast food, retail, hospitality,pharmacy, restaurants and registered/licensed clubs industries. These reductions were decided following the FWC’s two year review of the modern awards and its finding that penalty rates are no longer ‘fair and relevant’.

Awards affected:

Modern awards under the Fair Work Act 2009 (Cth) contain minimum entitlements for wages and conditions of employment. Not all employees are covered by an award and their rates of pay may alternatively be governed by contract or enterprise agreements. Even if you or your employees are not covered by one of the relevant awards the reductions may still affect you if you work in one of the effected industries

The FWC’s decision to cut penalty rates affects the following modern awards:

  • Fast Food Industry Award 2010 (Fast Food Award)
  • General Retail Industry Award 2010 (Retail Award)
  • Hospitality Industry (General) Award 2010 (Hospitality Award)
  • Pharmacy Industry Award 2010 (Pharmacy Award)
  • Registered and Licensed Clubs Award 2010 (Clubs Award)
  • Restaurant Industry Award 2010 (Restaurant Award)


Overview of changes:

  • Sunday penalty rates have been reduced under theFast Food, Retail, Hospitality, and Pharmacy
  • Sunday penalty rates have not been reduced under the Restaurant and Clubs
  • Public holiday penalty rates have been reduced under the Fast Food, Retail, Hospitality, Restaurant and Pharmacy
  • Public holiday rates have not been reduced under the Clubs


Table 1: Changes to Sunday penalty rates




Sundaypenalty rates (% of permanent base rate)
Full and Part-time employees Casual
Fast Food Award (Level 1 employees only) 150125 175150
Retail Award 200150 200175
Hospitality Award 175150 no change
Pharmacy Award 200150 200175
Clubs Award no changes
Restaurant Award no changes




Table 2: Changes to public holiday penalty rates




Public holidaypenalty rates (% of permanent base rate)
Full and Part-time employees Casual
Fast Food Award 250225 275250
Retail Award 250225 275250
Hospitality Award 250225 275250
Pharmacy Award 250225 275250
Clubs Award no changes
Restaurant Award 250225 no changes


When will the changes be coming into place?

  • Reductions to Sunday penalty rates will be phased in by annual instalments over a period of at least 2 years. The first reduction is likely to occur from 1 July 2017 (the FWC is yet to reach a concluded view on the transition to the new Sunday penalty rates).
  • The new public holiday rates take full effect from 1 July 2017.


Find out if the changes affect you – review your employment arrangements

Both employees and employers working in the effected industries should review their employment arrangements. The impact of the changes will vary across workplaces depending on whether employees are covered by one of the effected awards or by an alternative contract/enterprise agreement.

If your workplace is covered by one of the relevant awards you should consider how the changes might affect you or your business. Employers should determine whether the reductions will apply to their employees and update their payroll systems accordingly.

Even if you are employed/employ staff under pay rates determined by contract or enterprise agreement you should investigate whether the reductions might indirectly impact your employment arrangements.

Note that the reductions have been met with opposition by union and the Labor Party and the FWC decision may be challenged in the future.


Get the best advice:

Should you require more detailed advice about how these changes might affect you or your business and staff, please do not hesitate to contact Lynn & Brown Lawyers to make an appointment with a member of our employment team


About the author:

This article has been authored by Claudia Giovannini at Lynn & Brown Lawyers.  Claudia is currently studying law at UWA and hopes to be admitted as a Perth lawyer in or about 2018.


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