Fears Sunday penalty rates will be cut after PC report released

The Productivity Commission has recommended Sunday penalty rates be the same as Saturday for hospitality and retail workers.

Call for Sunday Penalty rates to be reduced. (File) Source: The Feed

Hospitality and retail workers should be subject to one weekend penalty rate, the Productivity Commission recommends.

But Employment Minister Michaelia Cash, in releasing the commission's final report into Australia's workplace relations framework on Monday, insists any change would be up to the Fair Work Commission.

"Why would the government set penalty rates? It's like asking the government to set interest rates," she told reporters in Perth.

Labor's workplace spokesman Brendan O'Connor said the proposed change to hospitality and retail penalty rates would significantly impact household budgets and should be rejected immediately.

"This report is Malcolm Turnbull's gift that no worker wants for Christmas," he told reporters in Melbourne.

Despite Senator Cash's claim it was an independent report, Mr O'Connor said it was commissioned by the government, which directed how it should be conducted.

The union representing retail and fast food workers said it was ridiculous to say that Sunday was no longer important and that employees shouldn't be compensated.

"If the prime minister adopts these recommendations, he'll be knowingly making life incredibly difficult for hundreds of thousands of families across the country," the Shop Distributive and Allied Employees Association's national secretary Gerard Dwyer said.

But the Australian Retailers Association said the recommendation around weekend penalty rates was an "important step" in the recognition that rates were not viable for employers.

Former ACTU secretary Martin Ferguson, now chairman of Tourism Accommodation, said the report was a refreshing contribution.

He urged the coalition and Labor to be realistic about its recommendations.

"We don't support abolishing penalty rates, but we do believe that premiums such as excessive Sunday and public holiday penalties should be reformed," he said.

"It's about incremental progress, not putting your head in the sand, thinking that shift penalties that were relevant in the 1930s and 1940s are still relevant."