'A sledgehammer to a nut': Business criticises penalty rates legislation

The plan to enshrine penalty rates in legislation is like "taking a sledgehammer to a nut," according to the Australian Industry Group (Ai Group), in its criticism of the government's push to prioritise the legislation. 

Ai Group chief executive Innes Willox warned that enshrining penalty and overtime rates into law could further reduce workplace flexibility amid rising unemployment.

"Overtime and other allowances are already routinely built into the working arrangements for millions of Australians so it is not clear yet what the practical impacts of the proposed legislation will be," Willox told HRD in a statement.

"Nonetheless, the proposed legislation once again seems to be like taking a sledgehammer to a nut."

Penalty rates protection a 'top priority'

The government intends to introduce the legislation this week to protect penalty and overtime rates for around 2.6 million Australians.

Employment Minister Amanda Rishworth said the legislation will insert a high-level principle into the Fair Work Act that operates alongside the modern awards objective. This ensures penalty rates and overtime will not be rolled up into a single rate of pay where it leaves an individual worse off.

"We want this law passed as a top priority, so workers are protected from the loopholes that see their take-home pay go backwards," Rishworth said in a statement.

"Enterprise bargaining is the appropriate place to negotiate on entitlements – not eroding the award safety net."

The legislation comes as employers in the retail, clerical, and bank sectors applied to the Fair Work Commission to trade away penalty rates of workers from awards.

According to Rishworth, the bill ensures that no worker will see their pay packet reduced in the wake of such applications.

"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 minister said.

'Anti-employment' legislation

Willox said employers are still in negotiation with the government about their proposal to legislate penalty rates, but warned that the law will be seen as "anti-employment."

"When the legislation is unveiled, employers across the economy will undoubtedly see it as yet another anti-employment and anti-productivity measure at a time when both employment and productivity seem a bit like Monty Python's parrot – not dead, just resting," the chief executive said.

The Ai Group previously criticised the government's plan as a "job killer" that will discourage businesses from opening on weekends and employing young Australians.