Approval of penalty rate cuts: Full Court dismisses unions’ appeal

Earlier this week the Full Federal Court rejected the Shop, Distributive and Allied Employees Association and United Voice’s appeal of the Fair Work Commission’s (FWC) decision to cut penalty rates earlier this year.

The determinations, varying five modern awards (the Fast Food Industry Award 2010, the Pharmacy Industry Award 2010, the Hospitality Industry (General Award 2010 and the Restaurant Industry Award 2010) were made on 21 June 2017. The effect of the determinations was to reduce Sunday, public holiday, evening and after-midnight penalty rates.

The unions sought judicial review of the determinations, arguing that:

  • the FWC failed to appreciate that the review of an award required under the Fair Work Act 2009 (Cth) is conditional on there being a material change in circumstances since the previous review
  • the FWC failed to take into account the relative living standards and the needs of low paid workers which is a part of the ‘modern award objective’ and
  • the determinations were generally ‘legally unreasonable’.

The five judges of the Full Court rejected all of the unions’ arguments, confirming that although these determinations are important to a great number of people, the purpose of an application for judicial review is limited to finding errors in law. The role of the Court is not to challenge the merits of the FWC’s determinations.

Considering the above, the Full Court confirmed there was no jurisdictional error in the way the FWC assessed all relevant matters and reached its conclusions, and therefore the penalty rate cuts will start being implemented as at July of this year.


Karl Rozenbergs

Karl Rozenbergs

Partner & Co-Lead, Health & Community

Employment lawyer Karl Rozenbergs advises clients in adverse action claims, on negotiating enterprise agreements and much more.

Nhu-Thuy Dinh

Nhu-Thuy Dinh is an experienced employment lawyer acting on behalf of and advising both public and private sector clients.

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