Workers who rely on award wages would have their rights to penalty rates and overtime pay protected under one of the first pieces of legislation to be introduced to the new federal parliament.
The changes to the Fair Work Act would effectively ensure workers paid under awards cannot have their penalty rates reduced in return for a higher rate of base pay if it leaves workers worse off.
The legislation, which the government expects to pass, would provide protections for the approximately 2.6 million people whose pay is set by an award.
The employment minister, Amanda Rishworth, on Saturday said the government was responding to cases before the Fair Work Commission that could result in cuts to people’s take-home pay.
“What’s become clear is that we need added legal protection to make sure penalty rates and overtime are protected in our award system,” she said.
“We want to make it clear in law that these penalty rates and overtime rates should be protected because we don’t want people earning less and working harder.”
Peak retail and business groups had applied to the industrial umpire to allow some companies to opt out of providing penalty rates for staff in exchange for a raise on base levels of pay. In response, Labor put forward a submission to the Fair Work Commission opposing the employer groups’ proposed changes.
As she addressed the media in Canberra to formally announce the reforms, Rishworth was joined by retail workers Daniel and Liarne, who spoke of the “huge difference” penalty rates made to their ability to live comfortably.
“My penalty rates are about $6.35 an hour, which is about $7,500 a year,” Liarne said.
“That’s really important because it helps me pay for rent, groceries, school fees and the care of my animals, which I love dearly.”
Rishworth said women, part-time or casual staff and those under the age of 35 were more likely to be covered by penalty rates.
The Albanese government had promised to enshrine penalty rates in law if re-elected, building on the sweeping industrial relations reforms it enacted during its first term despite fierce opposition from employer groups.
The new measures set the stage for further disagreements between the government, unions and the business lobby before next month’s productivity summit at Parliament House.
Convened by the treasurer, Jim Chalmers, the government’s “roundtable” will also consider tax reform and ways to lift living standards.
The treasurer has said that the 19-21 August talks would be organised around themes of resilience, productivity and sustainability.
Federal parliament will resume on Tuesday for the ceremonial opening, with the first pieces of legislation – including the penalty rate protections and reductions to Hecs debt – to be introduced later in the week.
