Australia’s Federal Government is moving to protect the existing penalty rate legislation, with Prime Minister Anthony Albanese labelling the move as “important” for delivering cost-of-living relief to Australians.
Workers in Australia’s café and hospitality industry could be significantly impacted by any change in penalty rate awards, with more than 61 per cent of the 958,000 people employed working on a part-time basis according to Jobs & Skills Australia.
Currently, workers may be entitled to increased pay when working on weekends, public holidays, late night or early morning shifts, or overtime as part of the current penalty rate system.
The move to federally protect penalty rates for award workers comes after the retail employer lobby introduced a proposal to allow some low-paid retail managers to opt out of penalty rate entitlements in exchange for a 35 per cent pay rise.
This matter is currently before the Fair Work umpire, with the government arguing penalty rates are a safety net for low-paid workers as justification for the introduction of the new legislation.
“This legislation will prevent award variations from reducing or removing penalty and overtime rates. It will ensure the wages of around 2.6 million modern award-reliant workers are protected,” says Minister for Employment and Workplace Relations Amanda Rishworth.
“Millions of hard-working Australians rely on penalty rates and overtime rates to keep their heads above water … if you rely on the modern award safety net and work weekends, public holidays, early mornings, or late nights, you deserve to have your wages protected.”
The Australian Chamber of Commerce and Industry (ACCI) says the legislation, titled the Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025 will only result in it becoming more difficult for employers and employees to negotiate salaries.
“This change is a backward step and out of touch with the realities of the modern economy,” says ACCI Acting CEO David Alexander.
“Employees want choice and flexibility and that needs to be at the heart of any workplace proposals … business needs that agility to survive, especially small businesses who already struggle with a complex and archaic system underpinned by an Act which is over 1600 pages long.
“Tying Australian businesses up in knots around workplace systems has the effect of strangling growth – and that means less jobs and lower wages. This Bill is at odds of the Government’s plans to improve productivity and instead injects more rigidity and complexity into the Fair Work laws.”
The Fair Work Amendment Bill 2025 was introduced to Parliament on Thursday 24 July.
