Amanda Rishworth (Kingston, Australian Labor Party, Minister for Employment and Workplace Relations) Share this | Hansard source

I move:

That this bill be now read a second time.

Introduction

I proudly introduce this legislation, delivering on our key election commitment to protect penalty rates.

The intent of this bill is simple.

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.

You deserve laws that ensure your pay will not go backwards.

Our laws are working

In our first term, the Albanese Government delivered landmark workplace relations reforms with a clear goal—getting wages moving for Australian workers.

We addressed loopholes that undermine principles of fairness and improved access to secure jobs and better pay. We reinvigorated enterprise bargaining, which results in more cooperative, productive workplaces.

We put gender equality at the heart of the workplace relations framework, helping drive the gender pay gap to its lowest level on record. We improved workplace conditions and protections right across the board.

And in every annual wage review since taking office, we've backed minimum wage increases, with our most recent submission calling for an economically sustainable real wage increase. I'm pleased that from 1 July minimum wages have been increased by 3.5 per cent.

These were significant and important reforms, and we fought hard to deliver them because working Australians deserve fair pay and decent conditions.

And we know that our changes to legislation are delivering improved outcomes for working people and employers.

Our same job, same pay laws have seen thousands of workers receiving up to $60,000 extra in their pay packets each year.

More than half of employers who responded to a recent Australian HR Institute survey said our right-to-disconnect laws had improved employee engagement and productivity.

The latest figures on enterprise bargaining show that nearly 2.7 million Australians are now covered by current enterprise agreements—the highest coverage on record since enterprise bargaining commenced in 1991.

Our laws are working to deliver real wage increases, improved conditions, and more cooperative and productive workplaces.

Now, we are continuing that work with a bill to protect penalty rates and overtime rates in modern awards.

Why penalty and overtime rates matter

Penalty rates and overtime rates matter. They are a longstanding feature and a vital part of the modern award safety net, which supports some of our lowest paid workers in our country.

Relative to all employees, award-reliant employees are more likely to be women, work part time, be under the age of 35 and employed on a casual basis—people like Emily, a retail worker from New South Wales expecting her first child and in the middle of moving houses:

On my normal rates it's a struggle to be able to afford the necessities, but with the penalty rates, it lets me breathe.

It gives me room to be able to save a little for my bubba, and to help me move to make sure my new little family has a roof over our heads. It also helps in times for when the bills pile up.

Or Eryn, a grocery store worker from South Australia:

I miss out on time with my children and my husband who works long hours, time spent with friends or family during off days, downtime to rest and recover.

Earning penalty rates makes it worthwhile being away from family and not taking the day to be able to rest and recover. It is extra money earnt for choosing to work rather than enjoy a day off.

Or Gary:

Because of the hours I work, I miss out on parts of our family life and being with friends. When most people are at home enjoying their time and doing things with their family, I'm working.

If I have to work late or on weekends I like to be compensated for the time I miss with my family watching them play sports and growing up.

What's at stake

This bill is about safeguarding fundamental entitlements for around 2.6 million modern award-reliant Australian workers.

We know that, right now, the modern award safety net can be undermined.

Currently, penalty rates and overtime rates in modern awards can be rolled up into a single rate of pay that leaves employees worse off.

There are current cases on foot where employers in the retail, clerical and banking sectors have made applications to the Fair Work Commission to trade away penalty rates of lower paid workers on awards.

We know the coalition are all too willing to back these applications. Former Liberal leader Peter Dutton confirmed it when he said 'we don't propose any departure from the current arrangements.'

We took a very different approach. In the retail case, our government intervened to argue as a matter of principle the wages of low-paid workers should not go backwards.

Because that's not fair.

And it's not what Australians expect of our workplace relations system.

This legislation will mean that proposals like these cannot be included in modern awards, which act as our safety net, and ensures penalty and overtime rates of low-paid workers are protected.

Operation of the principle

This bill will amend the Fair Work Act 2009 to enshrine protections for penalty rates and overtime rates in modern awards.

The bill introduces a new section, 135A, which establishes a clear and important principle.

When exercising its powers under part 2-3 of the Fair Work Act to make, vary or revoke modern awards, the Fair Work Commission must ensure:

This bill is designed to be simple, fair, and workable.

It introduces a high-level principle, not a prescriptive rule, because we are committed to strengthening the modern awards system without adding unnecessary complexity.

It is targeted to modern award terms that are about the 'percentage' of penalty or overtime rate to be paid and terms that reduce workers' pay by 'rolling up' penalty and overtime rates with other modern award terms into a single rate of pay.

It means modern award covered workers who rely on penalty and overtime rates as a critical part of their overall pay no longer have to worry about reductions to those rates.

And exemption rate proposals that diminish workers' take-home pay cannot succeed in the future.

This bill does not stop parties engaging on ways to make awards easier to use, or ensuring that award terms can adapt to modern working needs.

For example, parties will still be able to put the case to the commission about appropriate hours of work terms, but where that case involves a penalty or overtime rate the commission will also need to consider this new principle.

This bill does not impact individual employment contracts. It does not apply to individual flexibility arrangements.

This bill will also not affect the enterprise bargaining framework, which is the right place for employers to directly negotiate with employees and their unions to achieve flexible and productive gains with appropriate safeguards in place such as the better-off-overall test.

We have consulted closely with stakeholders to ensure these reforms are practical and balanced.

Importantly, the changes introduced by this bill will not disrupt employers' day-to-day operations.

The amendments will not apply retrospectively. Employers covered by the award system already have an ongoing responsibility to correctly apply the relevant modern award. Where that award provides for employees to be paid penalty and overtime rates, that obligation will just continue.

This bill does not impose new obligations beyond that existing responsibility.

Role of the Commission

We respect the Fair Work Commission's role as the independent industrial tribunal. That role is unchanged.

The commission will continue to interpret and apply the Fair Work Act, including the new principle introduced by this bill. This process will be guided by its usual consultative approach, ensuring all interested parties have the opportunity to present their views.

This bill also preserves the commission's existing powers to remove an ambiguity, uncertainty or to correct an error in a modern award.

Interactions with bargaining

The appropriate place to negotiate on entitlements is the enterprise bargaining system.

We want to see enterprise bargaining. Enterprise agreements deliver better deals for working people, better wages and conditions and more cooperative and productive workplaces.

The government has reinvigorated the enterprise bargaining system so that we now have a record-high number of employees covered by federal enterprise agreements that are delivering real wage increases for Australian workers. As at 31 March 2025, the commission approved 9,829 agreements since our reforms, covering nearly 2.5 million employees.

The average annual wage increase for those agreements is 3.8 per cent, compared to a 2.7 per cent increase in 2022, and the 5-year average preceding the legislation, which was also 2.7 per cent.

As at 31 March 2025, almost 2.7 million employees were covered by a current enterprise agreement—the highest coverage since bargaining began in 1991. And for the sixth consecutive quarter, wage growth in newly approved enterprise agreements outpaced inflation.

Encouraging workers and business to engage with good-faith bargaining gives workers access to improved conditions and can help business owners attract and retain talent. This can improve the relationships in the workplace, facilitating innovation, greater acceptance of new technology and the fostering of skills growth for employees—all of which enhance productivity.

Enterprise agreements continue to be subject to the better off overall test, ensuring that employees are better off overall compared to the relevant modern award. That safeguard remains unchanged.

Conclusion

For many modern award reliant employees, penalty and overtime rates are not optional extras; they are a critical part of their take-home pay. This is especially true in sectors like retail and hospitality, where work often takes place at unsociable and irregular hours and where workers are among the lowest paid in our economy.

This bill is about fairness. It's about respecting the millions of Australians who work those public holidays, weekends, late nights and early mornings to keep Australia going.

And it's about making sure that the safety net does what it's meant to do—protect those most in need.

I commend the bill to the House.

Debate adjourned.

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