The Fair Work Commission

HRM

HRM 1
Contents
Introduction............................................................................................................... 2
Impacts of the penalty rates as a legal environmental factor on the HR planning, job design and
quality of work practices of the hospitality industry..............................................................2
Recommendations to address the identified impacts.............................................................7
References................................................................................................................ 9

HRM 2
Introduction
The penalty rates are deliberated to be long-standing and significant part of
Australia’s workplace relations context. It is an important mechanism to make sure that
people are satisfactorily compensated for absent on household activities, social and family
get-togethers. The penalty rates are remunerated as a system to reimburse persons who work
during hours which are measured unsociable or the time which is related to the leisure
activities which is weekend, public holidays, late night or early morning shifts. The
employees who work on the week off like Sundays or public holidays give up their valuable
time. It puts the impact on persons, families, and communities. It has been considered that
penalty rates offer some measure of monetary reward for the sacrifice of appreciated vacation
time.
Impacts of the penalty rates as a legal environmental aspect on the HR planning, job design
and quality of work practices of the hospitality industry
People are likely to work on the late nights, early mornings and even on the weekends
as the rate of pay is higher in such shifts. It is also due to the low pay given to the workers
employed in the hospitality industry. Earning on the odd times makes employees meet needs.
As a unit, employees working on odd and extra hours are highly susceptible to financial
stress. Such employees even depend on penalty rates to light basic living expenditures. Such
fact was observed by the Fair Work Commission (FWC) and made the choice to reduce the
penalty rates. FWC reformed the penalty rates of Sunday and public holidays in the
hospitality reward from the pay period started on 1 July 2017 (Hathway, 2017).
It has been realized that some of the employees just earn to meet weekly survival
expenses. This way saving money becomes problematic and unforeseen expenses put
substantial financial suffering. In February 2017, FWC implemented penalty rates for full
time and part-time workers in the hospitality industries to reduce the penalty rates. The
reductions were commenced in July 2017 and it was decided to execute on 1 July every year
over 3 years. FWC decided to bring penalty rates in effect from 1 July 2017 (Wright, 2018).
From the effective date, both part-time and full-time employees will be remunerated 225% of
their base pay rate for working on the public holidays. The workers will even be liable to get
25% of their base pay for working on Christmas even if comes on the weekends. The casual
employees will be entitled to get 250% of their base pay rate for functioning on the public

HRM 3
holiday. The penalties will even be imposed even if employees work early mornings and late
nights from Monday to Friday (McCaughey, Mao & Dowling, 2018).
HR planning is a regular and systematic process of planning to accomplish extreme
usage of the administration’s most appreciated asset which is human resources. HR planning
in the hospitality industry ensures an adequate supply of human resources with effective
utilization. If it's talked about the penalty rates then the workers will constant to attain
penalties under the FWC rules, 2017 but these will be reduced. The penalties have a great
role in HR planning as it assists in intensifying employment opportunities for younger
workers. The penalty rates assist younger workers to get the organizations which are
enthusiastic to work even on week offs and public holidays. It is a must for HR to have the
capability to sustain and communicate effectively with the workers for sorting
confrontational issues (Wright, 2017). The HR planning undertakes complaints of the
employees to enable effective communications has been observed that lower penalty rates in
the hospitality industry have reduced labor turnover. There are vacant positions in hospitality
organizations, therefore there is a need to recruit new persons. The workers working on the
weekends and holidays have reduced the necessity of the additional workers. When the
hospitality industry plans to expand then the necessity arises to hire more workers. In such a
case, reduction in the penalty rates empowers employees to work on the weekends and
holidays. It also lessens the burden of the hospitality industry to hire new workers. Therefore,
the decrease in penalty rates becomes effective in the expansion plans of the organizations. It
even anticipates the surplus or shortage of the employees with the avoidance of unnecessary
discharges (Gahan, Pekarek & Nicholson, 2018).
The hospitality industry has monitored that the Saturday penalty rates meet the award
objective. On the other side, Sunday rates did not meet qualified standards. For both part-time
and full-time employees of the hospitality industry, the Sunday rates have been decreased
from 175% to 150% of the routine wage. The Sunday rates were cut more as compared to the
Saturday rates as Sunday work is considered to have a higher level of disutility for the
workers. Reducing penalty rates will also upsurge the trading hours with the level and range
of services (McIvor & Markey, 2017). It creates challenges for the hospitality industry
because trading hours of the operation tend to develop. Reducing penalty rates is beneficial
for the organizations which claim that they can not pay for to have protracted hours. On the
other side, reduced penalty rates can be seen as a contravention in the case of workers and
willingness to do extra hours can be an obstacle for the organizations. There is a significant