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The nightmare before Christmas – new penalty rates from 1 November 2018

October 09, 2018

By Calum Woods and Lindsay Carroll, NRA Legal

From 1 November 2018, retailers will be required to pay a new evening penalty rate to casual employees for work performed after 6:00pm Monday – Friday.

In a decision issued 27 September 2018, the Fair Work Commission (Commission) determined that the new penalty rate (which is similar to the existing evening penalty for full-time and part-time employees) was necessary to achieve the modern awards objective. The Commission also considered it necessary to increase the existing Saturday penalty rate for casual employees, and reduce the penalty rates applicable to shiftworkers.

The decision comes as many businesses commence to scale up their workforces and increase operating hours in preparation for the busiest time of year in retail.

The new penalty rates for casual employees will be introduced over the next three years, commencing on 1 November 2018:

Monday – Friday (work performed after 6.00 pm)

1 November 2018

Additional 5 per cent

1 October 2019

Additional 10 per cent

1 March 2020

Additional 15 per cent

1 October 2020

Additional 20 per cent

1 March 2021

Additional 25 per cent

 

Saturday (all work performed)

1 November 2018

Additional 15 per cent

1 October 2019

Additional 20 per cent 

1 March 2020

Additional 25 per cent

There is some uncertainty around the relationship between the new penalties and existing entitlements. It is expected that the current Saturday penalty rate for casuals will increase from 10 per cent to 15 per cent (or 40 per cent inclusive of casual loading), and that the overtime penalty rates for work performed on Saturday will not be affected. The Commission is expected to issue Determinations reflecting the changes and resolve these ambiguities within the following weeks.

The new penalty rates applicable to shiftworkers will be as follows:

Full-Time and Part-time Shiftworkers

1 November 2018 

195 per cent

1 July 2019

190 per cent

1 July 2020

175 per cent

 

Casual Shiftworkers (inclusive of casual loading)

1 November 2018 

220 per cent

1 July 2019

215 per cent

1 July 2020

200 per cent

The decrease in penalty rates for shiftworkers comes as a change in direction in the current environment. The Australian Bureau of Statistics last week reported that retail turnover for the month of August rose only 0.3 per cent. Despite this stagnation, retailers are now required to carry the additional cost of a new penalty rate for casual employees, while still dealing with the impact of casual conversion that came into effect on 1 October 2018.

If your business relies on the NRA’s wage summaries, updated versions reflecting the new penalty rates will be made available once the final Determination has been issued. If you require specific advice about what the new penalties rates mean for your business, contact NRA Legal on 1800 RETAIL (738 245).


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