Magazine of Socialist Action in Australia

Penalty rates must be defended

Reading Time: 2 minutes

Australian workers won penalty rates as compensation for working anti-social hours in 1909. For many workers, penalty rates can be the difference between being able to afford rent or not. Yet under pressure from employers, workers are at risk of losing a necessary source of income.

The Fair Work Commission will make a decision on whether to reduce penalty rates for retail, hospitality, and entertainment workers sometime late this year to early next year. The decision was pushed back from September as the Australian Industry Group, who have been lobbying to lower Sunday penalty rates to match the Saturday rates, have been given more time to prepare their submissions for the case.

Big business lobbyists claim that a cut to penalty rates will help the economy and small-business owners and increase employment, but they have failed to provide any substantial evidence for these claims.

Another suggestion being floated is for workers to be allowed to ‘cash in’ penalty rates for a slightly higher base rate of pay. As we have seen with places like Coles, Woolworths and McDonalds, this would result in many workers being left worse off overall. The end result of cashing in penalty rates at these major chains has been increased financial strain on already low paid workers, and increased profits for already wealthy employers.

Unfortunately, some trade unions, like the right-wing Shop, Distributive & Allied employees Association (SDA), have already done dodgy deals to cash in (or just reduce penalty rates) and this has encouraged employers to push for the practice to become more widespread.

An entirely different approach needs to be adopted with the entire trade union movement coming together to fight against these attacks on wages and conditions. The fight to defend penalty rates is much bigger than just the retail, hospitality, and entertainment industries. It is directly linked to the struggle to close the gap between rich and poor.

By Kai Perry


The COVID-19 pandemic has laid bare many of the problems with capitalism. The Socialist strives to explain the systemic causes of this crisis, and reports about the issues that are important to working people. We also help to organise struggles against the powers that be.

We don’t receive a cent from big business or governments. Our work is fully funded by our supporters. Even if half the people who read our website every month donated a few dollars each we would raise thousands to help our work!

We need organisations of struggle now more than ever, so if you support what we do please consider making a donation.

One-off or regular donations can be made securely HERE.