In this blog article, we discuss some changes to the General Retail Industry Award 2010 (‘the Retail Award’) that are coming up on 1 November 2018. The changes increase some penalty rates for casual employees.
On 27 September 2018, the Fair Work Commission (‘FWC’) handed down a decision increasing penalty rates for casual employees working on Saturdays and during evenings i.e. after 6pm on weekdays under the Retail Award.
What is the current position?
Permanent full-time and part-time employees who perform ordinary hours of work after 6pm on Monday to Friday are currently entitled to an additional 25% penalty whereas casual employees do not receive an additional penalty.
Casual employees who work on a Saturday currently receive an additional 10% penalty (in addition to their 25% casual loading) and full-time and part-time employees receive an additional 25% penalty for working ordinary hours on a Saturday.
What are the changes?
Casual employees must be paid the following penalties (in addition to the 25% loading) for all work performed on a Saturday as follows:
- From 1 November 2018 – an additional 15% penalty
- From 1 October 2019 – an additional 20% penalty
- From 1 March 2020 – an additional 25% penalty
Further, casual employees working evenings i.e. after 6pm on Monday to Friday will receive the following penalties in addition to their 25% loading:
- From 1 November 2018 – an additional 5% penalty
- From 1 October 2019 – an additional 10% penalty
- From 1 March 2020 – an additional 15% penalty
- From 1 October 2020 – an additional 20% penalty
- From 1 March 2021 – an additional 25% penalty
Why did the FWC do this?
As part of the four-yearly review of the Retail Award, the FWC found that the current casual rates “lack logic and merit”. Relevantly, the FWC distinguished casual loadings and penalty rates and noted that they are “separate and distinct forms of compensation for different disabilities”. The FWC noted that penalty rates are meant to compensate employees for the inconvenience associated with working late nights, weekends and at odd hours whereas the casual loading is paid to compensate casual employees for the nature of their employment and the fact that they do not receive the entitlements that permanent employees receive such as annual leave, personal leave, notice and termination and redundancy. The FWC said that “the casual loading is not intended to compensate employees for the disutility of working evenings or on Saturdays”.
In order to ensure that the Retail Award provides a “fair and relevant minimum safety net of terms and conditions”, the FWC determined to increase penalty rates for casual employees. This decision will impact employers in the retail industry with changes taking effect on 1 November 2018. In order to minimise the adverse impact on employers, these penalty increases will be implemented gradually.
These changes should not affect employers operating their businesses under an enterprise agreement. However, if you are operating under the Retail Award, it is important for you to understand your obligations and the potential impact on your business especially with the need to engage more casuals during the busy Christmas period which is fast approaching.
At Employment Innovations, we have a number of industry experts who can assist you with navigating through these changes. You can also access unlimited workplace advice as part of our subscription products to ensure compliance.