The living standards of low-paid workers were not taken into account by the Fair Work Commission when it decided to slash penalty rates, the hospitality workers' union has told the Federal Court.
United Voice is one of two unions that have launched last-minute legal bids to overturn the industrial umpire's controversial decision earlier this year to cut penalty rates for workers on Sundays and public holidays.
The decision in March was supported by the Turnbull government but seized on by Bill Shorten and the Labor opposition as a case where the independent commission had made a mistake.
A panel of five judges in the Federal Court has begun hearing the appeals by United Voice and the Shop, Distributive and Allied Employees Association. Both cases brought by the unions are being heard simultaneously.
The legal proceedings are scheduled to run for three days.
On Tuesday, Herman Borenstein, for United Voice, said the penalty rates decision had not given sufficient regard to workers' living conditions.
"It is part of our case that the full bench did not take into account the relative living standards of the low paid," he said.
Mr Bornstein, QC, also argued there had been no requirement to review penalty rates because there had not been a "material change in circumstances".
But Justice Geoffrey Flick questioned what would happen if the Fair Work Commission later accepted that low-paid workers were being treated "shabbily" but could not act because there had been no material change in circumstance.
United Voice has previously said the Fair Work Commission failed to "uphold and improve" workers' living standards.
Earlier this year, the commission handed down its decision to slash penalty rates in the hospitality, fast food and retail sectors.
The decision prompted howls of protest from unions, who argued workers were already struggling with cost of living pressures.
But it was welcomed by industry groups, which say the decision will help businesses to grow and hire more staff.
The Australian Hotels Association and Australian Industry Group are both listed as respondents in the appeals. They will argue the Fair Work Commission's cuts should be delivered.
Under the commission's decision, the first cut to penalty rates will be 5 percentage points, with more significant cuts in 2018 and 2019 for fast food and hospitality workers.
Retail and pharmacy workers will have cuts to their Sunday penalty rates phased in until 2020.
Under the changes, Sunday penalty rates will be cut from 200 per cent to 150 per cent over four years for full-time and part-time employees in the retail sector. Sunday penalty rates for hospitality workers will drop from 175 per cent to 150 per cent over three years.
Before the hearing, United Voice national secretary Jo-anne Schofield said the union could not "leave this harsh decision unchallenged".
"We continue to fight for the penalty rates of Australian workers because United Voice members cannot turn away and accept a decision that is already financially impacting Australians who work weekends and public holidays," she said.
The Shop, Distributive and Allied Employees Association national secretary Gerard Dwyer said a retail worker on $600 a week could expect to lose $80 per week.
"This is a pay cut that ordinary Australians simply cannot not afford," he said.
The hearing continues.
With AAP
