Australia Welcomes Bill to Protect Penalty Rates for 2.6 Million Workers – Full Details Inside

The Albanese Government has introduced legislation for the first time as an incoming government aimed at protecting penalty and overtime rates for 2.6 million award-reliant workers. The bill fulfills a promise made during the election that workers would not see their take home pay reduced through changes to penalty rates.

The Bill supported by the Australian Council of Trade Unions (ACTU) is intended to stop employers from bargaining away penalty and overtime pay which are entitlements relied upon by low-paid workers especially women, young workers, part-timers and casuals. The legislation will prevent the Fair Work Commission from approving any variation in awards that will reduce or replace penalty or overtime rates.

Why Is This Bill Being Introduced?

The Bill is a direct reaction to a suggestion from retail employer groups which represented the interests of large companies such as Coles, Woolworths, Kmart and Costco to allow some low paid store managers to trade away penalty entitlements for a 35% increase in their salary. The government intervened in the case to ensure that award-based loadings are an important safety net and cannot be affected.

Amanda Rishworth, the Workplace Relations Minister stated that the legislation is vital for ensuring “hard-working Australians can depend on the penalty and overtime rates in times when they require them to make ends meet.”

What’s at Stake for Workers?

The award system is used less often in some areas because of enterprise bargaining. Nevertheless, workers continue to be covered by awards in the retail, hospitality and aged care sectors. The Bill is expected to be supported strongly by unions and the Greens. Employer groups and the Opposition have voiced concerns about the potential negative impact of the Bill on small businesses.

Similarly, discussion is being had about work from home rights and the Fair Work Commission are thinking about whether flexible workers can still receive loadings. The Bill may impact on this issue, depending on how it may change over time.