Unions have lost their court challenge to cuts in Australia's penalty rates

Photo by Dan Kitwood/Getty Images

A challenge to the Fair Work Commission’s cuts to weekend penalty rates for hospitality, retail and fast-food workers by Australian unions has been rejected by the Federal Court.

The court’s full bench rejected arguments by the unions, United Voice and the SDA (Shop, Distributive & Allied Employees Association) for a judicial review of the FWC decision, which claimed the commission had failed to properly consider the impact on low-paid workers.

The reductions to Sunday and public holiday penalty rates can now proceed, with retail workers set to see Sunday rates reduced from 200% of the standard hourly rate to 150% for both full- and part-time workers. Hospitality staff will see their pay drop from 175% to 150%, with fast food workers’ penalty rates reduced from 150% to 125%.

The cuts also apply to casual staff, except for the hospitality industry.

Australian Retailers Association executive director Russell Zimmerman welcomed the decision, saying retailers continue to face disappointing growth figures.

“These disappointing growth figures, combined with increasing economic pressures are significantly affecting employment rates across Australia, and stifling retail growth nationally,” he said.

“The ARA hopes the ALP and other political parties who are seeking to overturn this decision are sensible enough to accept the umpire’s decision.

“With the entrance of many international players into the Australian market, and the continual increases in energy and rental prices, the ARA look forward to the next penalty rates reduction on 1 July 2018.

“This second penalty rates reduction phase will lessen the strain on Australian retailers, put the unemployed back into the workforce, and increase trading hours across the country.”

Under transitional arrangements to reduce penalty rates, the cuts will be phased in over a four-year period.

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