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Thursday, 4 April 2019
Page: 14938

Workplace Relations

Dear Chair

Thank you for your correspondence concerning a petition on penalty rates, reference EN0816.

Responsibility for setting award wages and conditions, including penalty rates, sits with the Fair Work Commission, not the Australian Government or the Federal Parliament. Just as interest rate decisions are made independently by the Reserve Bank, decisions about employment awards are made by the Fair Work Commission. It is done this way to ensure outcomes are evidence-based and not political.

In February 2017, the Fair Work Commission decided that the levels of Sunday and public holiday penalty rates in five awards in the retail and hospitality sectors were not fair and relevant. Based on the evidence presented to it, the Fair Work Commission reduced some penalty rates for some workers, with the changes being phased in over three or four annual instalments from 1 July 2017.

The Fair Work Commission did not completely cut Sunday or public holiday rates and the award rates are still higher than Saturday rates. In its decision, the Fair Work Commission said a reduction to penalty rates in the affected awards was expected to have a range of benefits for small businesses and jobs, including more hours of work for existing employees or the engagement of new employees.

It is not however possible to specifically disaggregate the employment impact of the Fair Work Commission's decision. Available data does not allow the reliable identification of workers who have their pay and conditions set by a specific modern award and who work on a particular day. Employment outcomes are also influenced by a range of other factors and the phasing in of the Sunday penalty rate changes on 1 July each year occurs at the same time as increases arising from the Fair Work Commission's Annual Wage Review take effect.

I trust this information is of assistance.

Yours sincerely

from the Minister for Jobs and Industrial Relations, Ms O'Dwyer (Petition No. EN0816)