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Unions lose penalty rates challenge

The Federal Court has ruled that the penalty rate cuts brought down by the Fair Work Commission in February will remain in place.

The court has rejected the challenge from the key unions, United Voice and the Shop, Distributive and Allied Employees Association.

The unions had appealed against the decision, saying the commission had failed to take into account the impact of the decision on low paid workers and arguing that it had not fulfilled its obligations under the Act when it made its decision.

But Federal Court Judge Mordy Bromberg disagreed, saying the commission’s decision was not hampered by any administrative issues.

"The Fair Work Commission alone was vested with the responsibility for assessing all relevant matters and reaching all the conclusions necessary to decide whether or not to make the determinations that it did," he said. 

"In the view of the court, the Fair Work Commission's decision read as a whole reveals no jurisdictional error."

The Fair Work Commission’s decision sees Sunday pay rates for full-time and part-time hospitality workers cut from 175 per cent of their standard wage to 150 per cent. Sunday wages for retail workers will be cut from 200 per cent of workers' standard rate to 150 per cent, for both full-time and part-time staff. Pay for fast food industry workers classed as "level one" will be cut from 150 per cent to 125 per cent.

The Australian Small Business and Family Enterprise Ombudsman welcomed the decision, saying it levelled the playing field against big business.

“Big business and unions have made deals in the past through enterprise agreements which traded penalty rates for union membership and higher base rates,” Ombudsman Kate Carnell said.

“Small businesses don’t have the capacity to negotiate enterprise agreements and continue to grapple with the most complex award system in the world.”

But ACTU secretary Sally McManus said the cuts would affect 700,000 workers in the hospitality, retail and pharmacy and called on the Prime Minister Malcolm Turnbull to step in.

“Australia needs a pay rise,” Ms McManus said. “Working people’s wages are flat-lining and their work is becoming more insecure. The government has a responsibility to act.”

by Leon Gettler, October 11th 2017