Young People Just Copped Another Hit: Penalty Rates Have Just Been Slashed

Hundreds of thousands of workers just had their pay cut.

youth unemployment

Want more Junkee in your life? Sign up to our newsletter, and follow us on Instagram, Twitter and Facebook so you always know where to find us.

This morning the Fair Work Commission (FWC) finally announced its ruling on the future of weekend penalty rates, and if you work in the hospitality, fast food or retail industries it’s bad news.

The commission has decided that Sunday penalty rates for full-time and part-time hospitality workers will be cut from 175 percent to 150 percent, full-time and part-time fast food workers will have their penalty rates cut from 150 percent to 125 percent while casuals will see their rates reduced from 175 percent to 150 percent, and retail staff will have their penalty rates reduced from 200 percent to 150 percent.

Public holiday rates have also been cut from 250 percent to 225 percent for hospitality and retail staff.

So if you’re one of the hundreds of thousands of Australian workers across those three industries who works on Sundays or public holidays, you just copped a pay cut. The changes will start to take effect from March.

One third of all retail workers are under the age of 24 and a majority are women. Most younger retail workers are employed on a casual or part-time basis, so today’s decision will impact some of the most vulnerable and low-paid workers across the economy.

Businesses have been lobbying for the changes since 2015, arguing that reducing penalty rates would lead to greater employment and longer trading hours. But unions have resisted any changes, arguing they would just amount to a pay cut for workers.

It looks like the FWC bought the argument from business groups. In announcing today’s decision, the commission said that cutting penalty rates would lead to “increased trading hours and an increase in the number of services offered” on Sundays and public holidays.

So you might be able to buy a flat white a bit later on a Sunday afternoon, but only because your barista is working for less. I hope you feel good sipping on that hot bean juice.

Under Australia’s current industrial relations framework things like penalty rates are decided by the FWC, though federal parliament does have the ability to override the commission’s decisions through legislation. The Coalition has already said it would stick to whatever the FWC came up with (and plenty of Coalition MPs have actually called for penalty rates to be cut), while the Greens have already announced they will introduce a bill to protect penalty rates.

Labor has previously called for the overall take home pay of workers to be protected in the event of a penalty rate cut.

Yesterday the Australia Bureau of Statistics released data showing that wage increases were still at their lowest rate ever recorded.

So while the Australian economy remains slow, job opportunities remain slim and housing and education costs keep rising, vulnerable young workers just took another massive hit.