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Sunday Penalty Rates Showdown Looms as Federal Court Hearing Begins

Unions and business groups will face off in the Federal Court today as a hearing begins on the Fair Work Commission’s decision to cut Sunday and public holiday penalty rates.

A full court of five judges will sit in Melbourne over the next three days to hear an appeal by unions against the commission’s decision in February to cut the rates for hospitality, retail and other workers.

United Voice national secretary Jo Schofield said the unions’ appeal had a strong legal argument.

“Firstly, we think the Fair Work Commission failed to consider the relative living standards and needs of the low-paid and they are required to under the act,” she said.

“We’ll also argue that penalty rates form an important part of the safety net for workers in the hospitality industry.”

Australian Hotels Association chief executive officer Stephen Ferguson said businesses, including the hospitality sector which he represents, would be able to generate more activity if the penalty reductions came into force.

He said the association was confident the commission’s decision would be upheld.

“We’ve reviewed the submissions of United Voice and others [to the Federal Court] and we believe that we’re on very solid ground, or the decision of the Fair Work Commission is on very solid ground,” he said.

“They were chartered by the [federal] parliament to conduct four-year reviews of awards.

“In our view they have complied by the act and we don’t see that the grounds raised by the union will succeed [in court].”

Landmark Decision

The commission’s decision was hailed by business groups, who had long argued the penalty rates were an unfair impost on employers and were holding businesses back on Sundays.

They also argued they could generate more work hours for staff if the Sunday rates were reduced.

The Federal Government also welcomed the decision.

Unions and the Opposition argued the workers whose Sunday rates would be cut were the people who could least afford it.

The size of the cuts vary between the four sectors affected. Some have had the Sunday rate slashed from 200 per cent of their Monday-Friday rate, down to 150 per cent.

Others face cuts from 150 per cent down to 125 per cent.

This week’s hearing in the Federal Court is being closely watched by both sides of the argument, as it is seen as a test of the commission’s powers under the act.

Also appearing at the hearing will be the Shop, Distributive and Allied Employees Association and the Australian Industry Group.

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