Sunday, public holiday pay rates cut

Angus Livingston
AAP

Sunday penalty rates will be slashed for Australia's hospitality, retail, pharmacy and fast food workers, the Fair Work Commission has ruled.

Public holiday rates will also be cut for hospitality and retail sector employees, from 250 per cent to 225 per cent.

The cuts could mean thousands of dollars a year taken out of workers' pay packets.

The commission took into account evidence from the Productivity Commission that said a reduction in penalty rates could lead to more employment.

"The evidence also supports the proposition that a reduction in penalty rates is likely to lead to increased trading hours, an increase in the level and range of services offered on Sundays and public holidays and an increase in overall hours worked," FWC president Iain Ross said on Thursday.

However, Mr Ross noted Sunday penalty rates would still be higher than for Saturdays.

"Generally speaking, for many workers, Sunday work has a higher level of disutility than Saturday work," he said.

The commission found Saturday rates should stay as they are but said the hospitality, retail, pharmacy and fast food awards "do not provide a fair and relevant minimum safety net".

Australian Council of Trade Union president Ged Kearney said workers on minimum wages relied on weekend penalty rates to survive.

"This is a bad day for workers in this country," she told reporters.

Australian Retailers Association executive director Russell Zimmerman said the decision would grow the sector.

"Reducing these rates from double time to time and a half, will increase retail growth nationally and reduce the unemployment rate in Australia," he said in a statement.

Ms Kearney said that was a "complete furphy".

"People whose pay is going to be cut ... will simply have to work more hours to make up that take-home pay," she said.

The commission said the rate cut could help drive employers to put people on as part-time employees rather than keep them on as casuals.

Sunday rates for hospitality workers will fall from 175 per cent to 150 per cent while those for fast food workers will drop from 150 per cent to 125 per cent.

Retail workers face a reduction from 200 per cent to 150 per cent.

Pharmacy workers who work from 7am to 9pm will see their penalties cut from 200 per cent to 150 per cent.

Casual workers on Sunday shifts will be paid 25 per cent more than full-time and part-time employees.

The public holiday changes will take effect from July 1, while the commission will hear submissions on how the Sunday penalty rate changes should be brought in.