News: Casual Penalty Rates to Increase Under SCHADS Award
30 September 2019:
The Fair Work Commission (the FWC) recently handed down its decision on 2 September 2019 which deals with claims to vary the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award). These claims, including the variation of the payment of casual loading in addition to penalty rates and overtime, were heard in April this year as part of the 4-yearly review of modern awards.
Penalty rates for casuals increased
In this decision, the FWC agreed with United Voice and the Health Services Union that existing rates for casuals working overtime, Saturdays, Sundays and public holidays are ‘not fair and proportionate to the disutility experienced by casual employees for performing such work’. The FWC has therefore decided to vary the SCHADS Award so that casuals receive the casual loading in addition to their weekend and public holiday penalty rates, and overtime rates. This effectively means an increase in penalty rates and overtime rates for all casual employees.
Currently, casual employees working weekends, public holidays and overtime are paid the applicable penalty rates and overtime rates under the SCHADS Award however, these rates are calculated on the base rate of pay and are in substitution for the 25% casual loading.
The FWC proposes to increase the overtime rates for casuals from 1 December this year. The FWC proposes to phase in the increase in penalty rates in two stages (transitional arrangements), the first on 1 December 2019 and the second, on 1 July 2020, as follows:
|(% of ordinary rate, inclusive of casual loading)|
|1 December 2019:||160||210||260|
|1 July 2020:||175||225||275|
Parties have been directed to file submissions in relation to the FWC’s proposals, and a hearing is listed for next month on 14 October.
Other proposed changes deferred or rejected
The FWC has deferred or rejected other claims to vary the SCHADS Award, including:
- Deleting or varying the 24-hour care clause so overtime is paid for all hours worked over 8 hours. The FWC expressed a provisional view to retain the 24-hour care clause. However, the FWC acknowledges a lack of clarity and deficiencies in the clause and has set out a process to address the issues raised.
- Inserting a new allowance for use of community language skills. The FWC has deferred its consideration of this claim and will issue a background paper and statement setting out how the FWC proposes to finalise this claim.
- Varying existing allowance for payment for registration and attendance costs where employees are required to update their first aid certificate. The FWC rejected this claim.
- Variation to prohibit rosters from being altered to avoid payment of public holiday entitlements. The FWC rejected this claim.
There are 23 claims for substantive variations to the SCHADS Award yet to be heard by the FWC. A list of these claims can be found here. Directions have been issued in relation to a second group of claims and the FWC has listed them for hearing on 15-18 October and 21-23 October 2019.
What this means for you
CCER advises our members to:
- consider these upcoming variations when rostering casuals as they will have a direct impact on your costs.
- prepare to update your payroll systems to ensure casuals are paid correctly when working Saturdays, Sundays, Public Holidays and overtime.
CCER will continue to keep you informed of any changes to the SCHADS Award as they occur. If you have any questions or concerns, please feel free to get in touch and speak with any of our Employment Relations Specialists.