Penalty Rates Transitional Arrangements

22 June 2017

In February 2017 the Full Bench of the Fair Work Commission decided to reduce Sunday and public holiday penalty rates in the Hospitality, Fast Food, Retail, and Pharmacy Awards and public holiday penalty rates in the Restaurants Award (please refer to our February 2017 Legal Alert – Penalty Rates Decision).

The Commission has now revealed how these reductions will be implemented, with the Sunday reductions to be phased in over 3 years, likely beginning from 1 July 2017. The changes to public holiday rates in all of the awards will be implemented in full from 1 July 2017.


The reductions will apply from 1 July each year. This is the same time the Annual Wage Review decisions apply each year, which will minimise the impact of the reductions. This year’s reductions will be offset by the 3.3% increase in the national minimum wage and wage rates in modern awards.

While the first set of reductions will come into effect on 1 July 2017, United Voice and the Shop, Distributive and Allied Employees Association (SDA) have indicated that they intend to challenge the penalty rates decision in the Federal Court – meaning these changes could possibly have to wait the outcome of the appeal.

Please enquire with EMA Legal if you need specific advice as to how this decision affects you. Changes to Award rates will not reduce existing obligations under enterprise agreements and individual employment contracts.

Please click here to view the full decision.

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