Federal Court upholds penalty rates decision

The Fair Work Commission’s decision to reduce some penalty rates has been upheld by the Federal Court of Australia.

On Wednesday the court rejected two appeals against the penalty-rate reductions brought down by the FWC in February.

In that decision, the FWC ruled that 7am-9pm Sunday penalty rates for full and part-time pharmacy employees will be reduced from 200 per cent to 150 per cent, and for casuals from 225 per cent to 175 per cent. These are to be phased in over four years. For public holidays the penalty rates have been reduced from 250 per cent to 225 per cent for full and part-time pharmacy employees, and from 275 per cent to 250 per cent for casuals.

The Pharmacy Guild welcomed that decision on penalty rates, which it said was reasonable, balanced and evidence-based – and once implemented would help enable community pharmacies to continue to provide access to vital medicines and other services across weekends and public holidays.

However, the Shop, Distributive and Allied Employees Association launched an appeal, which was rejected on Wednesday.

In its ruling, the Federal Court said: “Broadly speaking, there are two categories of challenge made in relation to the task performed by the Fair Work Commission.

First, the unions contended that the Fair Work Commission’s task miscarried because it failed to appreciate that ‘the review’ of awards required by section 156 of the Fair Work Act is conditional on there being a material change in circumstances since the conduct of an earlier review. That challenge is rejected.”

On the second issue, the court said, the union contended the Commission had not properly understood the nature of the inquiry required under section 134 of the Fair Work Act, which specifies the “modern awards objective”.

“In the view of the Court, the Fair Work Commission’s decision, read as a whole, reveals no jurisdictional error in its construction or application of section 134 of the Fair Work Act,” the court said.

The Pharmacy Guild said it acknowledged the decision by the Federal Court to uphold the Fair Work Commission’s penalty-rates decision.

The Guild noted that the Federal Court upheld the principle that the FWC was alone vested with the full responsibility for assessing all relevant matters and reaching all relevant conclusions in making its determinations regarding employment conditions.

The ACTU attacked the court’s decision, with Secretary Sally McManus demanding action from the Prime Minister to “reverse these cuts and protect working people’s pay”.

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

“And it gets worse. These pay cuts will continue over the next four years, so thousands of families will continue to find it more difficult to just get by.

“With wage growth at record lows across the country, these pay cuts mean people will go backwards.”