Hundreds of thousands of Australia’s lowest-paid workers will begin to lose penalty rates from Sunday, as a Fair Work Commission decision takes effect. The ruling, made in February, gradually reduces Sunday and public holiday rates for retail, pharmacy, fast food and hospitality awards. Labour and unions are intensifying efforts to overturn the decision.
Hospitality worker Selina Young, who works two jobs in Queensland to save for IVF treatment, relies heavily on penalty rates. “I know how hard it is now, so I can only imagine how hard it is if it gets any worse,” she said. The Council of Small Business Australia estimates 80% of workers in affected sectors are employed by large companies such as Coles, Woolworths and McDonald’s, which have enterprise agreements and may not be directly affected. However, unions warn that the cuts will eventually flow through to worsen conditions.
The commission’s ruling is complex, with different impacts across industries. A retail worker on an hourly rate of A$19.44 will lose A$77 from an eight-hour Sunday shift. The Australian Council of Trade Unions estimates a reduction of A$6,000 in annual take-home pay for some workers, though small business groups dispute that figure. Public holiday cuts take effect immediately, while Sunday rates will be phased down over two to five years.
The Fair Work Commission justified the cuts as a means to boost employment, citing evidence that high Sunday rates had led businesses to restrict trading hours and reduce staff. President Justice Iain Ross acknowledged the changes would “inevitably cause some hardship” but promised transitional arrangements. A Guardian Essential poll found 56% of voters disapproved of the decision, with only 24% believing it would lead to more jobs. Labour leader Bill Shorten has pledged to legislate to restore the existing Sunday penalty rates.
