FWA chief flags replacement to weekend penalty rates

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The chief of the Fair Work Commission has proposed replacing weekend penalty rates in the retail industry with ‘loaded’ (higher) hourly rates, which would avoid the need for small businesses to enter into a new enterprise agreement.

Speaking at the AFR’s Retail Summit on Thursday, Fair Work Commission president Iain Ross noted a clause in the Hospitality Industry Award in which an employer and employee can enter into an ‘alternative’ arrangement to the payment of the weekly minimum wages prescribed in the award.

“In essence, and subject to some important safeguards, they can enter into an agreement to pay the weekly rate plus 25 per cent in lieu of the entitlement to penalty rates and overtime,” he said.

However, Ross conceded the provision is not necessarily appropriate for the retail industry.

“But it should be possible to develop a schedule to the award which provides that employees are paid a higher, ‘loaded’, hourly rate of pay – in lieu of an entitlement to penalty rates,” he said.

“There would need to be appropriate safeguards and interested parties would be given an opportunity to comment on any proposal.”

According to Ross, a loaded rates schedule would allow small businesses to access additional flexibility, without the need to enter into an enterprise agreement.

Ross noted the idea to incorporate loaded hours rates in the award system would be revisited after the completion of the main penalty rates review, which is set to be released by the end of the year or start of next year.



He also revealed the Fair Work Commission has received 6000 submissions into varying the modern retail award.

The CEO of the Council of Small Business of Australia, Peter Strong, has welcomed the discussion, stating community expectations for businesses to be as available on weekends as they are during the week.

“The weekend has become less sacrosanct than it was 30 years ago and many people are just as happy to work on weekends as they are during the traditional Monday to Friday week,” Strong said in a statement.

He highlighted that while there are some challenges in changing long-held employment practices such as weekend penalty rates, small business has had to accommodate increased societal demands for weekend trading.

“It is only sensible that we revisit weekend employment practices,” Strong said.

“We warmly welcome President Ross’s leadership on this issue and we will be discussing this with our members and look forward to participating in this discussion in the near future.”


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