Penalty rates: Productivity Commission recommends changes to weekend pay for entertainment, hospitality and retail workers.



The Productivity Commission has recommended changes to weekend penalty rates, calling for Sunday rates to be brought into line with Saturday’s time-and-a-half payments.

The recommendations — laid out in the commission’s final report into workplace relations released on Monday — would affect workers in the entertainment, hospitality and retail industries, if adopted.

The commission did not recommend any changes to overtime penalty rates, night penalty rates or shift loadings, nor changes to rates for nurses, teachers or emergency services workers.

“Penalty rates have a legitimate role in compensating employees for working long hours or at asocial times,” it stated.

“However, Sunday penalty rates for hospitality, entertainment, retailing, restaurants and cafes are inconsistent across similar work, anachronistic in the context of changing consumer preferences, and frustrate the job aspirations of the unemployed and those who are only available for work on Sunday.

“Rates should be aligned with those on Saturday, creating a weekend rate for each of the relevant industries.”

Announcing the report’s findings, Employment Minister Michaelia Cash said the Government would examine the recommendations and, if the case for sensible and fair changes to workplace relations were outlined, they would be taken to the next election.

Senator Cash said the commission recommended that penalty rates should continue to be set by the independent Fair Work Commission and the Government has no plan to change the rates itself.

“The only recommendation that the Productivity Commission makes on penalty rates is directed to the independent Fair Work Commission and that is in relation to the weekend penalty rates for the retail and hospitality industry,” she said.


“Whether or not the independent Fair Work Commission accepts or rejects this particular recommendation is a matter for the Fair Work Commission.”

Senator Cash said any changes would be taken to an election.

“The Government has said that if there is a good case for fair and sensible changes to the workplace relations framework, these will be clearly outlined and they will be taken to the Australian people and we will seek a mandate at the next election,” she said.

“That is what we promised and we intend to keep that promise.”

The commission said that despite sometimes significant problems, Australia’s workplace relations system was not systematically dysfunctional.

“It needs repair, not replacement,” it stated.

The Commission made almost 70 recommendations unrelated to penalty rates, including:

– Commissioning a comprehensive review of apprenticeship and traineeship agreements
– The introduction of measures that encourage migrants to report exploitation
– Changes to unfair dismissal laws, including more hurdles to clear before taking it to arbitration

The Commission also recommended the creation of a new organisation to review modern awards and the minimum wage.

Turnbull’s Christmas gift no worker wants: Labor

The Federal Opposition has been vocal in its campaign against any potential changes.

Labor’s workplace spokesman Brendan O’Connor described the report as Prime Minister “Malcolm Turnbull’s gift that no worker wants for Christmas”.

Mr O’Connor said called on the Government to reject the recommendation to change penalty rates.

“We want to see the economy grow, but people share in that growth,” he said.


“The fact is we do have a weekend where people enjoy themselves, spend time with their families.

“We usually have weddings, christenings, birthdays, sporting events, most often are on weekends, yet of course we have millions of Australians who work on those days providing services and goods to the bulk of Australians.

“They should be rewarded for the deprivation that they have insofar as spending time with their friends, their family, and others.”

Current penalty rates in Australia

The below chart shows the current penalty rates for hospitality workers in Australia (%). The Productivity Commission has called for Sunday rates to be lowered to 125 per cent.

Retailers support clarity over migrant worker rules

Mr O’Connor conceded some of the work by the commission “has been good work”, a comment backed by the head of the Australian Retailers’ Association.

The association’s executive director, Russell Zimmerman, supported the recommendation to change the Fair Work Act to clarify migrants working illegally would be covered and could seek compensation if underpaid.

It comes after convenience store 7-Eleven was found to have underpaid migrant workers and forced some to breach their visa conditions.

Mr Zimmerman acknowledged it had been an issue for the industry.

“There has been an incredibly large amount of publicity around that at the moment and I know that many, many employers are very concerned about that, particularly in the franchising industry,” he said.

“They’re checking through their franchisees to make sure that they are compliant with the awards.”

This post originally appeared on ABC Online.


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