How the new public holiday payment option will impact QSRsBy Steve Champion
An employer application to change the Fast Food award safety net - part of an initial 2-year review of modern awards by the Fair Work Commission – will soon result in a new payment option for employers and employees for work around public holidays.
Fast Food employers and their ‘weekly’ employees – but not casuals - will soon be able to agree to substitute the existing extra time and a half payment for work on a public holiday, with an equivalent paid day off to be taken within 4 weeks, or have an extra day added to their annual leave.
Put in another way, currently the modern award provides that employees working on a public holiday get paid a total of 250% of their ordinary rate (275% for casuals). Under the new arrangements, they can work and get paid their standard rate for the day, then get a paid day off to be taken within 4 weeks. If they don’t get to take the day off, they will get paid out the equivalent of the extra day.
Cost Reduction Possible – Only By Agreement
The upside for employers is that by reaching agreement with a weekly employee, the effective cost to the employer for the work on the public holiday can be reduced to 200%, down from 250%. Some employers have chosen not to trade on public holidays because of the cost of labour, meaning the employer has lost the trade on the day and the employee has not earned penalty rates for the day.
The employee and employer are entitled to a fresh choice of payment or time off by agreement on each occasion work is performed on a public holiday. If there is no specific agreement (which should be evidenced in writing for proof purposes), then the default position of the 250% holiday penalty will apply.
The change will apply to all non-casual employees covered by the Fast Food Award, but won’t change conditions for employers and employees covered by enterprise agreements, unless the arrangement is already permitted by the agreement. With the decision only handed down on 30 September 2013, at the date of this article the Fair Work Commission is yet to issue the orders making the changed conditions legally effective.