The Fair Work Commission yesterday announced a 25 percent cut in penalty rates on Sundays for casual employees.

The decision will see a reduction in casual loadings from 175% to 150% effective as of 1 July 2014, a move that has been welcomed by peak industry association, Restaurant & Catering Australia (R&CA).

R&CA CEO John Hart, said that the positive result has come after the association’s "historic fight" for changes to the penalty rate regime, which were introduced through the Restaurant Industry Award in 2010.

The association initially made an application under the Modern Awards Review Process in 2012 to change the award, sighting deteriorating trading conditions since the introduction of the new rates. The application was rejected by the Fair Work Commission in October 2013, which resulted in R&CA lodging an appeal to a Full Bench.

“[The changes] will provide labour cost relief for restaurant and caf operators currently trading on Sundays,” said Hart. “Businesses that are currently shut on Sundays may re-consider closing – returning convenience to Sunday diners.

“The industry will most likely save about $112 million each year – with this decision ensuring the industry continues to push for further penalty rate reforms under the Fair Work Commission four yearly review of Modern Awards.”

The topic of penalty rates were widely debated over the recent Easter holiday season with many restaurants and cafes across Australia stating that they would be forced to either close, or fork out up to $45 per hour for casual workers.


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