What Does the Sunday Penalty Rate Cut Mean for You?

What happened to penalty rates?

Today the Australian Fair Work Commission announced that Sunday penalty rates in a number of industries would be slashed. The industries effected are retail, fast food, hospitality, and pharmacies.


In today’s 24/7 economy, employers argue that differentiating Sundays as a special working day no longer applies. They say that employees actually want flexible working arrangements, including the ability to work weekends, and then take days off during the week.

However, the current penalty rate structure means that some employees receive more than three times the standard weekday pay rate, meaning that employers either can’t afford to open on Sundays, or they have to use fewer staff members.

What now?

But with today’s decision by the FWC, this will change from July. For example, full-time and part-time retail workers will see their Sunday penalty rate fall from 200% of the standard rate to 150% of the standard rate. Casual workers will see their rate fall from 200% of the standard rate to 175% of the standard rate.

According to the Australian Council of Trade Unions, more than a million Aussie workers could see their pay cut by $6,000, or 20%, as a result of this change. That’s real money, which many will miss once the cuts come into effect.

Of course, employers will argue that while some workers will lose out, lower penalty rates means that employers will be able to increase staff numbers on Sundays, potentially resulting in higher overall wages for other workers.

What’s your take on this? Is the penalty rate cut good or bad for the Aussie economy and the workforce? Send your responses to letters@moneymorning.com.au

Kris Sayce


Kris Sayce, dubbed the ‘Jeremy Clarkson of Australian finance’, began as a London finance broker specialising in small-cap stock analysis on London’s Alternative Investment Market (AIM). Kris then spent several years at one of Australia's leading wealth management firms. A fully accredited advisor in shares, options, warrants and foreign-exchange investments, Kris was instrumental in helping to establish the Australian version of the Markets and Money e-newsletter in 2005. He is the Publisher, Investment Director and Editor in Chief of Australia's most outspoken financial news service, Markets & Money.

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