Passing of Penalty Rates Bill a “backward step”

Media Release: 28 August 2025 

The Australian Chamber of Commerce and Industry (ACCI) has described the passing of legislation in the Senate to lock in penalty rates as a backward step which will lead to less flexible workplace arrangements.

Australia’s largest and most representative business network says the outcome will erode Australia’s international competitiveness, undermine the workplace umpire and create more unnecessary regulation on businesses already overloaded with red tape.

ACCI chief executive officer Andrew McKellar says the legislation is the opposite of what both employers and employees demand from a modern workplace.

“This will restrict the ability for business to provide the flexibility that employees increasingly demand, such as the ability to work from home or other hybrid arrangements which are mutually agreeable to employers and employees,” Mr McKellar said.

“Worse, the bill opens the door to remove a range of flexibility terms that already exist in Modern Awards that have delivered for both employees and business for many decades.

“Instead of looking towards a modern 24/7 economy which the community has embraced and moved on, this legislation is a retrograde step, it’s takes us backwards.”

ACCI made a submission to the Senate Education and Employment Legislation Committee urging it to recommend against passing the bill into law.

The submission said that the bill was “fundamentally flawed” and that its provisions were “completely at odds with the needs of contemporary Australian workplaces.”

ACCI argued that the Bill exceeds the original election commitment to protect penalty rates, extending its scope to include overtime rates and rolled up pay arrangements, which were not part of the initial promise.

“The Bill creates rigidity in workplace arrangements, hindering flexibility, productivity, and simplicity, while increasing complexity for employers and employees alike,” said Mr McKellar.

"By locking in practices of the past and removing the ability to deal with challenges of the future, this Bill fails to recognise that the broader community debate has moved on and embraced the reality that flexibility and adaptability are key to business viability and job creation.” Mr McKellar said.