The Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025 (the Bill) was passed by the Australian Parliament on 28 August 2025. The Bill will amend the Fair Work Act 2009 (Cth) (FW Act) to protect penalty and overtime rates in modern awards.
A new section 135A will be inserted into the FW Act to ensure that when the Fair Work Commission (FWC) exercises its powers to make, vary or revoke a term in a modern award, it may not:
In 2017, the FWC amended a number of modern awards including the Hospitality Industry (General) Award 2010, Fast Food Industry Award 2010 and General Retail Industry Award 2010 to reduce penalty rates for employees. The new section 135A of the FW Act will prevent the FWC from being able to make decisions like this in the future.
The amendment will capture applications to insert a term in a modern award which proposes that an employee can be paid a percentage above the minimum award rate (for example, by way of a loaded rate or “rolled up” rate of pay) as a trade-off for penalty rate and overtime entitlements. The amendment ensures that the FWC cannot vary an award or introduce such award terms which result in employees receiving less pay.
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