Right: penalty rates were originally designed to compensate workers who worked weekends and evenings, nights etc, and who were thus unable to attend church services or regular sports events such as Saturday afternoon football matches.
 Found a word you're not familiar with? Double-click that word to bring up a dictionary reference to it. The dictionary page includes an audio sound file with which to actually hear the word said. |
Background information
Overtime and penalty rates in Australia
In general terms 'overtime' concerns the rate of pay for work done beyond or in addition to the ordinary hours of work on any given day of the ordinary working week (Monday to Friday).
'Penalty rates' concerns the rate of pay for work done on a weekend (Saturday and/or Sunday) or on a public holiday.
Each concept is derived from the premise that an employee is entitled to a premium rate, over and above their normal hourly rate, when required to work extended continuous hours of work, or when required to work on days and/or at times which are outside the ordinary hours of work as defined in the employee's Award.
In the restaurant industry overtime rates are typically an extra 12 per cent for working after normal business hours, and penalty rates are an extra 25 per cent for working Saturday, an extra 50 per cent for working Sunday, and two and a half times the normal salary for working on public holidays.
Health professionals typically get an extra 50 per cent for working on the weekend. Retail workers typically get 25 per cent for Saturdays, double for Sundays and two and a half times for public holidays.
Origin of penalty rates
In 1919, the then Commonwealth Conciliation and Arbitration Commission said Sunday penalty rates were compensation for working 'unsociable hours'.
In 1950, the New South Wales Commission said weekend penalty rates aimed to compensate disturbance of family and social life, religious observance and 'to discourage employers from working employees on weekends'.
Reviewing penalty rates
In December, 2014, the Fair Work Commission released a schedule of hearings to run throughout 2015 as part of a four-year review of all modern awards. It has confirmed it will examine proposals by employer groups to change penalty rates as part of the wider review. Employer groups had until February 13, 2015, to lodge submissions for any proposed changes to the award.
The Australian Council of Trade Unions president, Ged Kearney, has claimed that employer groups are making submissions in relation to the operation of penalty rates in a range of industries including retail, hospitality, pharmacy, fast food, dry cleaning, laundry, hair and beauty, amusements and events.
On December 19, 2014, the federal government announced the terms of reference for a Productivity Commission review of workplace laws under the Fair Work Act, including a consideration of conditions, wages and penalty rates.
Australian Chamber of Commerce and Industry chief executive officer Kate Carnell welcomed the announcement of the Productivity Commission review of the Fair Work Act, saying Australia needed a more modern and flexible workplace suited to its 24/7 economy. Ms Carnell stated, 'We need to make sure penalty rates are realistic and don't make businesses unviable.'