Unions lose Federal Court penalty rate appeal

October 14, 2017
United Voice national secretary Jo Schofield described the court’s decision as a "new low blow" for Australian workers.

The Federal Court has dismissed a legal challenge by United Voice and the Shop, Distributive and Allied Employees Association (SDA) to the Fair Work Commission's (FWC) decision to cut penalty rates for pharmacy, hospitality, retail and fast food workers.

The court found on October 11 that the commission met its legal obligations when it decided in February to cut Sunday and public holiday penalty rates for full- and part-time workers.

In a three-day hearing last month, the unions argued the commission's views were inconsistent with the Fair Work Act, it did not properly understand the nature of the inquiry and failed to take into account relative living standards and the needs of low paid workers.

But, in his judgment, Federal Court Judge Mordecai Bromberg said although the decision to cut rates was unquestionably important to a large number of people, the court's role was limited to finding errors in law and he found no jurisdictional error in the way the FWC made its decision.

"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.

"The court's task does not entail reviewing the correctness of the Fair Work Commission's conclusions. The court's task is restricted to reviewing the process by which the Fair Work Commission arrived at those conclusions.

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

The FWC’s ruling cut Sunday pay rates for hospitality workers from 175% of their standard wage to 150%. Retail workers’ Sunday pay rates are cut from 200% to 150%. Penalty rates for fast food workers classed as "level one" drop from 150% to 125% of their standard pay. The Australian Council of Trade Unions said about 500,000 people will lose up to $6000 a year in penalty rates under this decision.

United Voice national secretary Jo Schofield described the court’s legitimation of the FWC’s decision as a "new low blow" for Australian workers.

“This is a blow not just for workers in hospitality and retail, who face the immediacy of these cuts, it is a blow for all workers,” she said. “When the people who need the protection of our system the most are let down in this way, it is a clear sign that our laws need to change. Our laws need to do more to protect Australian workers from going backwards as these workers have.

"When our industrial relations laws are used by employers to cut pay and undermine the existing entitlements of workers in our country, when the courts refuse to intervene and when our Government refuses to utter a word in support of these workers, the system is broken.

"We will continue to challenge this harsh and unfair pay cut and will continue to speak out on behalf of all workers.”

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