Fair Work Commission Update – Retail Penalty Rates and Updates to Modern Awards

Fair Work Commission Update – Retail Penalty Rates and Updates to Modern Awards

 

The Fair Work Commission has recently made decisions that impact on penalty rates payable in the Retail industry, as well as all employers whose employee are covered by Awards. The general Award changes are not significant, relating predominantly to the simplification of language on consultation, dispute resolution and Individual Flexibility Agreements, but important for all our clients to be aware of.

General Retail Industry Award 2010 – what do I need to know?

On 27 September 2018 the Full Bench of the Fair Work Commission (FWC) handed down a decision that will see significant changes for employers and employees who are covered by the General Retail Industry Award 2010 (the Retail Award)

The FWC’s decision made changes to the Retail Award that apply from the first full pay period on or after 1 November 2018.  They affect the Saturday rate for casuals, the weekday evening penalty rate for casuals and the Sunday shiftwork rate.

The changes are being phased in over the next 2 to 3 years, and are as follows:

Sunday Penalty Rate

The FWC made it clear that it was “desirable to bring the Sunday penalty rates for shiftworkers and non-shiftworkers into alignment as soon as practicable.”  In order to do this, the FWC has handed down transitional arrangements to ensure that the changes are phased in over a period, to minimise the impact for employers.

The transitional arrangements are as follows:

  Effective first full pay period on or after Percentage
Full time and part time shiftworkers – Sunday 1 November 2018 195%
1 July 2019 190%
1 July 2020 175%
Casual shiftworkers (inclusive of casual loading) 1 November 2018 220%
1 July 2019 215%
1 July 2020 200%

Saturday Penalty Rate for casual employees and evening work on Monday to Friday

For casual employees working Saturdays and/or evening work, the following transitional arrangements apply:

  Effective first full pay period on or after Percentage
Saturday Work – Casuals (inclusive of casual loading) 1 November 2018 140%
1 October 2019 145%
1 March 2020 150%
Evening work: Monday to Friday Casuals (inclusive of casual loading) 1 November 2018 130%
1 October 2019 135%
1 March 2020 140%
1 October 2020 145%
1 March 2021 150%

 

How does this affect me?

For employers, these provisions take effect from the first full pay period on or after 1 November 2018 meaning that from this time, Casual employees and shiftworkers covered by the Retail Award will be paid differently.  It is important to update your employee records and payroll data to reflect these changes, as failure to pay your employees correctly may incur penalties through the PWC.

 

Other updates to modern awards – what do I need to know?

Whilst we have your attention, the FWC has also introduced some other updates to the modern awards as part of the modern award review.

·     Employees who fail to give adequate notice

A standard clause has been introduced into modern awards whereby if an employee, of at least 18 years of age, does not give the required period of notice when leaving their position as detailed in the National Employment Standards (NES), the employer may deduct no more than one week’s wages from the employee’s final termination payment. It is important to note however, if the employer agreed to a shorter period of notice, no deduction can be made.

·     Final termination payments to be paid within 7 days

Most Modern awards will now make it clear that an employer will be required to pay their employees final pay within 7 days of the employment ending. This is a shorter period than previously required so please update your payroll process to ensure compliance with this point.

·     Consultation, Dispute Resolution and Individual Flexibility Arrangement clauses

The FWC is currently in the process of adopting plain English language in all modern awards. In doing so, modern awards have been revised and updated with new Consultation, Dispute Resolution and Individual Flexibility Arrangement clauses.

 

What do I need to do?

Employers that are covered by the Retail Award must now:

  1. Provide information, whether verbal or written, to employees regarding how their pay may be affected as a result of the above changes.
  2. Update the back end of your accounting or record keeping system to reflect the changes to penalty rates and casual loading as this impacts how employees are to be paid.
  3. For employers currently negotiating enterprise agreements or considering the option of an enterprise agreement ensure that the rates of pay and penalties meet at least the requirements as specified by the Retail Award.

All employers:

  1. Update your modern award.If you keep a copy of the modern award saved on your computer or a printed version, make sure that you are using the most up to date copy, especially in relation to consultation on changes, dispute resolution requirements and if you have any employees who are covered by Individual Flexibility Agreements (or might in the future). To check that you have the most up to date copy of the modern award check the FWC’s website here: https://www.fwc.gov.au/awards-and-agreements/awards/modern-awards/modern-awards-list

Feel free to reach out if you would like some support in understanding and implementing these changes. You can contact us at yourteam@seedpeopleconsulting.com.auor call us on (02) 4967 6695.

 



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