Penalty rates ruling sparks political row

Labor has pledged to bring in laws to protect take-home pay following the decision by the independent umpire to cut weekend and public holiday penalty rates for about a million retail and hospitality workers.


But the Turnbull government and business groups say the Fair Work Commission’s independence should be respected and the decision will boost jobs and investment, especially in regional areas.

Labor leader Bill Shorten said the decision turned “three decades of industrial relations modernisation” on its head.

“The reality is that the unthinkable has happened – we are seeing mass pay cuts under a Turnbull government,” Mr Shorten said in Sydney.

He said the government should now work with Labor on new laws to “protect peoples’ conditions … and protect their take home pay”.

If the decision were allowed to go ahead, it would flow on to other sectors and industries in a “race to the bottom”, Mr Shorten added.

Employment Minister Michaelia Cash said it was an “inconvenient truth” for Labor that Mr Shorten, during his tenure as workplace minister, changed the Fair Work Act to require the Fair Work Commission to review penalty rates as part of a four-yearly process.

“Today’s decision by the commission to adjust penalty rates is, therefore, a direct result of the review process put in place by Bill Shorten,” Senator Cash said.

“Any suggestion by Bill Shorten and the Labor Party that they do not accept this decision is highly hypocritical.”

She rejected suggestions the decision could flow on to other workforces, such as nurses and emergency service workers.

“The Fair Work Commission in its decision clearly states that they have no intention of this decision flowing on anywhere else,” she said.

Senator Cash did not expect an “overnight” lift in jobs, but said many employers would find it easier to open on a Sunday and give their staff more work hours or put on extra workers.

Mr Shorten appeared at a media conference with two workers, one of whom said he would lose $109 a week from his pay packet.

“I’m gutted,” said Trevor Hunter, a 22-year-old Coles worker.

Labor is likely to get the backing of the Greens for any legislation to protect penalty rates for retail, fast food, hospitality and pharmacy workers.

“This is a body blow to the hundreds of thousands of people who depend on penalty rates to make ends meet,” Greens industrial relations spokesman Adam Bandt said.

The issue is likely to dominate next week’s parliamentary question time and Senate estimates hearings on workplace relations.

Former coalition workplace minister Eric Abetz said he would be asking the FWC why it took three years to make the decision.

Union sources told AAP the campaign against the decision would include lobbying politicians, advertising, protest rallies and possible strike action, as well as discussions with employers.

It is understood Coles workers won’t be impacted by the decision as they are covered by an enterprise agreement.