In brief

3 min read

The full bench of the Fair Work Commission (FWC) has issued a provisional view that it is open to adding loaded rates to the Hospitality Industry (General) Award 2020 (Hospitality Award).

If introduced, loaded rates would replace overtime and penalty rates for higher-paid (level 3 and above) hospitality workers with a higher ‘rolled-up’ rate.

Key takeaways

  • After the Minister for Industrial Relations on behalf of the government asked the FWC ‘to undertake a process to ensure several priority modern awards in sectors hardest hit by the pandemic be amended’, the FWC commenced a process on its own motion (the Award flexibility–Hospitality and retail sectors matter) to consider varying the Hospitality Award, inviting submissions from industry representatives.
  • As explained by the FWC: ‘A loaded rate refers to a higher rate of pay intended to incorporate, in part or in whole, penalty rates and other monetary benefits for which separate provision is made in the applicable modern award. The loaded rate is then paid for all hours worked instead of certain penalty rates (such as the penalty rates for Saturday and Sunday work).’
  • The FWC noted that the accommodation and food sector has been one of the industries hit hardest by the pandemic, and could be further impacted by future lockdowns.
  • The Australian Hotels Association (AHA) produced a loaded rates proposal, which was subjected to the Better Off Overall Test (BOOT) analysis. FWC’s provisional view was that the proposal passed the BOOT.
  • The next steps are for the United Workers Union to file submissions (by Friday 20 August 2021), the AHA to file submissions in reply (by Friday 27 August 2021) and for the application to be determined on the papers. However, if there is a request for an oral hearing, this will take place on Tuesday 31 August 2021.
  • If introduced, loaded rates would make it easier for employers to ensure they meet their payment obligations to employees due to the administratively simpler system of paying one rolled up rate, regardless of when the work is performed.