Restaurant starters to lose Sunday loading

SUNDAY penalty rate payments for inexperienced casual restaurant workers will be cut by one-third after the Fair Work Commission acknowledged a link between such rates and employment opportunities.

While a tribunal full bench rejected a fresh employer push to cut Sunday penalty rates from 50 to 25 per cent, it ruled that an additional 25 per cent casual loading should no longer be paid to introductory level restaurant employees on Sundays.

The commission said it accepted that the 50 per cent Sunday penalty rate would have “some effect on employment’’ in the restaurant sector, particularly when owner-operators

worked themselves rather than employing staff for extra hours.

However, it said the effects were not as significant as argued by the industry, citing consistently strong jobs growth over the past 20 years.

While a 50 per cent Sunday penalty rate was generally appropriate for restaurant employees, the tribunal said the additional 25 per cent casual loading tended to “over compensate” transient and lower-skilled casual employees for working Sundays.

It said these workers were primarily young employees who mainly worked weekends and the loading was “more than is required to attract them for work” on Sundays.

From July, casual employees employed on Level 1 and Level 2 pay grades will receive a maximum 50 per cent penalty rate for working Sundays.

Australian Chamber of Commerce and Industry chief executive Kate Carnell said the decision was “a small but significant victory for common sense and young people’’.

“This finding accepts that high penalty rates on Sundays are costing jobs,” Ms Carnell said. “With youth unemployment on the increase, we need to create all the jobs for young people that we can.

“This ruling is particularly important today, taking into account the changes to youth unemployment in the budget.

“Changing penalty rates on Sundays would significantly increase job opportunities for young people.”

Employers have previously had little success in their attempts to reduce penalty rates with the commission consistently rejecting applications to reduce payments to workers.

However, employers in other sectors are likely to try and exploit yesterday’s ruling to try and reduce casual loadings that apply to workers in their industries.

Source:  The Australian - 15 May 2014