Industrial Relations

Restaurateurs appeal penalty rates decision: Industry body calls weekend rates “commercially unviable”

Myriam Robin /

A month after the Fair Work Commission threw out its complaints about the industry award, Restaurant and Catering Australia has lodged an appeal to the full bench of the Fair Work Commission.

The appeal is intended to overturn the decision of Fair Work deputy president Anne Gooley on October 10 to reject all substantive changes proposed by the industry.

The industry case sought for changes to the award to overhaul the current weekend penalty rates system, and replace it with a penalty rate that only kicks on if an employee is required to work more than five consecutive days. Failing that, the RCA suggested penalty rates be reduced to 125% on Saturdays, and 150% on Sundays.

The industry also sought to exclude small businesses from the minimum wage rates contained in the award.

These changes were rejected, as the commission didn’t believe there had been enough change in the industry to warrant changes to the Award, which was drafted in 2010. The ruling also said the commission believed such changes would be have a “negative impact on the relative living standards and needs of the low-paid who would need to increase the hours [they] worked simply to maintain their current income.”

RCA chief executive officer John Hart tells SmartCompany the association has no choice other than to appeal this decision.

“This really shouldn’t be about what the commission favours and what it doesn’t – it’s about whether the process for running their review has been followed, whether the decision has been made on the basis of the principles of law, and whether all the evidence has been taken account of.

“The allegation in our appeal is that that hasn’t happened.”

Hart adds that despite the objective in the Fair Work Act for the commission to consider the needs of small businesses, they are woefully absent from the discussion. “In fact, there has been no decision taken on the facts of the needs of small business,” he says, adding that penalty rates are causing restaurants to close.

“Restaurants and café businesses become commercially unviable if they are penalised for operating during core trading times,” he says.

Early last year, RCA workplace relations director Greg Parkes told SmartCompany he received many calls from businesses that have to close down on weekends and public holidays because they cannot afford to stay open.

“We’re constantly getting calls from our members; they’re putting a lot of pressure on us. We want these points to be part of the Fair Work review and make these changes.

“We have university students who want work on weekends, or Friday to Sunday. But because of penalty rates, we have to pay them more. It’s not commercially viable.”

“What we want to do is just strike them at the ordinary rate, without the penalty rates for weekends. At the moment, you can’t do that, because you’d be considered in breach of the rules for staff being better off overall.”

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Myriam Robin

Myriam Robin is a reporter for SmartCompany and its sister site LeadingCompany. She has degrees in economics, international studies and journalism. She likes writing about businesses taking risks and doing new things.

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