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Penalty rates appeal rejected by Federal Court

Release Date: 26/08/2014

Debra Murphy CEO of the Illawarra Business Chamber, says the Federal Court’s dismissal of an appeal into penalty rates will bring relief for the business community.

 “This is a win for many small businesses the region in the hospitality sector who can now afford to open their doors on a Sunday,” Ms Murphy said.

 “Hopefully this will bring to an end the ‘ghost town’ effect, particularly in smaller communities, on a Sunday, where it’s actually more cost effective to close rather than open the doors and be crippled by exorbitant hourly rates.

 “I’m expecting café owners across the region to be looking to employ more staff, as well as extending the shifts of those already employed.

 “Over 3,500 businesses in the Illawarra are in the retail and hospitality sectors, and they are key employers across the region.

 “I’m stunned that the Union decided to challenge this ruling in the Federal Court, because logically they should welcome any opportunity that enables extra shifts for many of their members.

 “I’m very pleased with the decision of the Federal Court. Award imposed costs of employing staff in this sector are out of kilter with reality and any relief is most welcome.”

 As part of the two yearly review of modern awards, Australian Business Industrial and the Restaurant & Catering Association of Victoria lodged an application to vary the Restaurant Industry Award 2010 in respect of penalty rates payable for work performed on Sundays.

 This application was initially rejected by the Fair Work Commission, but on appeal in May this year, the Full Bench of the Commission partially overturned that earlier decision.

 In doing so, the majority of the Full Bench ruled that the Restaurant Award should be varied to reduce Sunday penalties from a 75% loading to a 50% loading, for three grades of casual workers.

 The Union with coverage of this sector, United Voice, appealed that decision, but that appeal was dismissed by the Federal Court.

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