Penalty rates cut upheld by Federal Court

11 October, 2017 by
Madeline Woolway

The Federal Court has rejected a legal bid by unions to overturn the Fair Work Commission’s (FWC) decision to cut penalty rates for hospitality, retail and fast food workers.

The court handed down the decision on Wednesday 11 October, with judges stating the court’s role was restricted to reviewing the process by which the FWC arrived at its conclusions and did not include reviewing the correctness of those conclusions.

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“The FWC’s decision read as a whole reveals no jurisdictional error in its construction or application of [section] 134 of the Fair Work Act,” the court found.

United Voice, which represents the hospitality sector along with other industries, challenged the cuts in court, arguing the decision meant the FWC had failed in its responsibility to uphold and improve the living standards of low-paid workers.

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United Voice hits out at Court over ruling

The judgment is a ‘low blow’ for workers, according to national secretary of United Voice Jo-anne Schofield.

“We pursued this appeal against the penalty rate cuts to stand up for hospitality workers and for all workers in this country,” she says.

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“Employer groups have led a sustained attack on the penalty rates of hospitality workers, in what is a fundamental attack on working people. We fear that employer groups will now continue to attempt to attack the weekend pay of workers in other industries.

“The wage-setting system has failed to protect some of our country’s lowest paid workers. Hospitality workers have been delivered a pay cut they can’t afford and don’t deserve. They will lose thousands of dollars a year from their pay packets as these cuts are fully implemented.

“We will continue to challenge this harsh and unfair pay cut and will continue to speak out on behalf of all workers.”

Other industry bodies have welcomed the decision.

“This decision upholds the long-standing independence of the FWC — it’s now time to get on with creating more jobs in the hospitality sector,” AHA National CEO Stephen Ferguson says.

“The AHA supports additional remuneration being paid for weekend work and the FWC originally found the new penalty rates to be “fair and relevant” for employees and employers.”

The Australian Small Business and Family Enterprise Ombudsman also supported the ruling.

“Big business and unions have made deals in the past through enterprise agreements which traded penalty rates for union membership and higher base rates,” ombudsman Kate Carnell said.

“Small businesses don’t have the capacity to negotiate enterprise agreements and continue to grapple with the most complex award system in the world.

“People’s lifestyles and expectations have changed over the past 20 years. Fewer people go to church and many people want to work and shop on Sundays and public holidays.”

The FWC announced the penalty rate cuts on 23 February 2017, with the changes set to be phased in over a period from 1 July 2017.