Employers slam the proposal as 'badly drafted legislation'
A new bill seeking to enshrine penalty and overtime rates into law has been introduced by the Federal Ggovernment, drawing strong criticism from employers.
The Labor government introduced the Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025 to Parliament on Thursday.
The legislation will prevent award variations from reducing or removing penalty and overtime rates, according to Employment and Workplace Relations Minister Amanda Rishworth.
"It will ensure the wages of around 2.6 million modern award-reliant workers are protected," the minister said in a statement.
"Millions of hard-working Australians rely on penalty rates and overtime rates to keep their heads above water, which is why this Bill is so critical and should receive the support of both the Opposition and the Greens."
The bill comes after the government previously signalled that it wants the law passed as a "top priority," as some employers in retail, clerical, and bank sectors applied to the Fair Work Commission (FWC) to trade away penalty rates.
'Badly drafted legislation'
Employers across Australia have long criticised the bill even before it was introduced.
In this latest development, the Ai Group called the bill "badly drafted legislation."
"The Penalty Rates Bill looks to implement unnecessary amendments that will neuter the Fair Work Commission's ability to be the independent umpire, and will provide less flexibility when Australian workers want more," said Ai Group chief executive Innes Willox in a statement.
"This is badly drafted legislation that is going to make it harder for employers to employ people who want to work when it suits them."
The FWC is required by law to ensure that awards provide a fair safety net of terms and conditions, according to Willox.
"The Government should be encouraging the Commission to consider how it can simplify and improve our notoriously outdated and unworkable award system. Sadly this Bill instead proposes to tie the Commission’s hands," he added.
David Alexander, acting chief executive of the Australian Chamber of Commerce, also called the bill a "backward step."
"This change is a backwards step and out of touch with the realities of a modern economy," Alexander said in a statement.
"Employees want choice and flexibility and that needs to be at the heart of any workplace proposals."
According to the acting chief, the bill contradicts the government's plans to improve productivity, and will instead introduce more rigidity and complexity in the Fair Work laws.
"It is essentially a vote of no-confidence in the ability of the industrial umpire to do its job and severely undermines its ability to respond promptly to changing economic conditions," he added.
Employers across Australia urged Parliament to carefully consider the technical detail of the legislation.
"We urge the Government to be open to making sensible amendments," Willox said.
