Two unions, United Voice and the Shop, Distributive and Allied Employees Association had challenged the commission’s decision, arguing it had failed to take into account how the cuts would affect the lowest paid workers.
But the Federal Court ruled that the commission had met its legal obligations when it handed down its decision in February to cut Sunday and public holiday penalty rates for full-time and part-time workers.
Federal Court Judge Mordy Bromberg ruled that there had been no jurisdictional issues when the commission made its decision.
“The Fair Work Commission alone was vested with the responsibility for assessing all relevant matters and reaching all the conclusions necessary to decide whether or not to make the determinations that it did,” he said.
“In the view of the court, the Fair Work Commission’s decision read as a whole reveals no jurisdictional error.”
The Fair Work Commission’s decision cuts Sunday pay rates for full-time and part-time hospitality workers from 175 per cent of their standard wage to 150 per cent. Sunday wages for retail workers will be cut from 200 per cent of workers’ standard rate to 150 per cent, for both full-time and part-time staff. Pay for fast food industry workers classed as “level one” will be cut from 150 per cent to 125 per cent.
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell welcomed the decision.
“Small business operators will be relieved at this decision, which levels the playing field in competition against big business,” Ms Carnell said.
“Big business and unions have made deals in the past through enterprise agreements which traded penalty rates for union membership and higher base rates.
“Small businesses don’t have the capacity to negotiate enterprise agreements and continue to grapple with the most complex award system in the world.
But SDA National Secretary Gerard Dwyer said the union would continue its fight.
He said slashing penalty rates for retail, hospitality and fast food workers was the first step. He warned that penalty rates for over 4 million Australians would be next under threat.
“In addition to slashing take home pay for retail and fast food workers, business lobby groups are already moving to attack the pay and conditions of hairdressers. If they are successful there is no doubt that the penalty rates for over 4 million Australians will next be on the chopping block,” Mr Dwyer said.