Employees usually get paid one penalty or shift allowance at a time. This is what it means when an award says that penalties aren't cumulative.

Example

Kane is an afternoon shift worker in a factory. He gets paid a 15% shift allowance for all his shifts.

When Kane works overtime, he gets paid overtime rates instead of the shift allowance. He doesn't get paid both amounts at the same time.

Some awards say that penalties are compounded. This means that a penalty gets paid on top of another penalty.

Casual loadings and penalties

In most awards when a casual gets a penalty, both the casual loading and the penalty are calculated on the base pay rate, and paid at the same time.

There are other ways that penalties can be calculated for casuals. These include:

• calculating the penalty on the casual pay rate, or
• no casual loading is paid when penalties are paid.

Always check the award to see if there is a specific rule that needs to be followed.

What if the award doesn't say how to treat casual loadings and penalties?

The penalty and the casual loading are both calculated on the casual's base pay rate, and paid at the same time.