The Power of Language: Taking the Penalty out of the Rates

2 June 2017

The Australian Hotels Association (“AHA“), Accommodation Association of Australia (“AAA“) and Pharmacy Guild have withdrawn their proposals to change the term ‘penalty rates’ to ‘additional remuneration’, ahead of a further hearing on the weekend and public holidays penalty rates case.

AHA chief executive Stephen Ferguson expressed his expectation that the Commission would likely refuse to consider the matter since the employer associations rescinded their application. The AHA boss said that the groups moved to rescind their application in the interest of “letting the Commission deal with more important matters”.

The full bench of the Fair Work Commission, in its ruling on penalty rates in February of 2017, held that the concept of penalty rates acting as a deterrent for weekend work was a fallacy and one which added considerable weight to the employers’ case for change.

In April, Iain Ross, the President of Fair Work Australia (“FWA“), called for submissions on the proposal put forward by AHA and AAA to make changes to the terminology in the hospitality award, and a similar proposal put forward by Pharmacy Guild for the pharmacy award. By way of statement and directions, Justice Ross AO asked for submissions in favour of the proposed changes to “identify the modern awards in respect of which change is sought”.

In the wake of the correspondence from the three employer groups withdrawing their applications, the Australian Business Industrial (“ABI“) and NSW Business Chamber responded to Justice Ross AO in a submission, lodged on 8 May 2017, asking the Commission to clarify whether it will continue with its review of the terminology.

Included in their submission, the ABI and NSW Business Chamber stated, “given that the 4 Yearly Review of modern awards is conducted on the Commission’s own motion and is to be distinguished from inter-parties proceedings, it is possible that the Commission may continue its review of penalty rates terminology, notwithstanding the AHA, AAA and Pharmacy Guild correspondence”.

The Commission has since published background papers that summarise the submissions on transitional issues for the proposed penalty rates changes since the February ruling. The issues covered in the submission include, but are not limited to, references to the late night and Saturday penalty rates in the retail award.