Fair Work Commission Clarifies Retail Award Penalties for Insufficient Breaks
From National Retail Association:
On 7 May 2024 the Fair Work Commission handed down a decision in a matter to remove uncertainty in the General Retail Industry Award 2020 (Retail Award). Specifically, to vary clause 16.6(b) of the Retail Award to clarify the penalty payable where an employee commences work without having had a 12 hour break between shifts.
The previous wording of clause 16.6(b) of the Retail Award was:
If an employee starts work again without having had 12 hours off work, the employer must pay the employee at the rate of 200% of the rate they would be entitled to until the employee has a break of 12 consecutive hours.
This wording in clause 16.6(b) created uncertainty regarding whether employees working a shift without a 12 hour break on a day that would entitle them to penalty rates, for example on a Sunday, would be entitled to 200% of their minimum rate of pay, or 200% of their Sunday rate of pay.
This decision clarifies that the correct penalty payable on the occasion an employee does not have a 12 hour break between shifts is 200% of the minimum hourly rate of pay, and not 200% of the rate that would have otherwise been paid on the second shift.
From 14 May 2024, clause 16.6(b) will read:
If an employee starts work again without having had 12 hours off work, the employer must pay the employee for each hour worked at the rate of 200% of the employee’s hourly rate until the employee has a break of 12 consecutive hours.
Following submissions made by the National Retail Association and other employer groups, the Full Bench of the Fair Work Commission has acknowledged that the previous wording of this clause created uncertainty and varying this clause will remove this uncertainty and ambiguity. The Bench noted that this uncertainty has been in effect since the modern award came into operation in January 2010.
The decision does not alter the ability for the employer and employee to agree to a minimum break of 10 hours between shifts, and where such agreement is reached, the penalty for an employee who commences work without having a 10 hour break will be 200% of the employee’s minimum hourly rate.
Where an employee is working without having had a 12 hour break on a shift that would otherwise entitle them to a higher penalty rate than 200% of their minimum hourly rate, for example on a public holiday, they will be entitled to the higher penalty rate.
For Coffee Commune Accelerator Members, should you have any questions about how this decision may affect your business, please call our Industrial Relations Hotline on 1800 844 190.