West Australian unions are furious the premier has flagged slashing penalty rates, but the hospitality sector says it will result in more jobs and better service for consumers.
Liberal leader Colin Barnett believes workers should only get a 50 per cent loading on Sundays and public holidays, not double or triple time.
While industrial relations are largely regulated by the federal government, the state can amend or create small business awards, which Mr Barnett says he may do, but will first observe the outcome of a Fair Work Australia review of penalty rates.
"Repeatedly I hear from tourist and hospitality operators that it's not worth their time opening on a Sunday or public holiday, or they operate a limited service, or they tell me if they do open, they run at a loss," Mr Barnett said on Wednesday.
"If we're serious about growing the tourism and hospitality industry, and a more vibrant, 24/7 lifestyle, which is happening in Perth, then employment conditions need to reflect that."
Australian Hotels Association WA chief Bradley Woods said penalty rates prevented many pubs and restaurants from hiring more staff, and for those that opened on public holidays, costs often had to be passed on to consumers.
United Voice WA secretary Carolyn Smith said those who relied on penalty rates were some the state's lowest-paid workers.
"Mr Barnett needs to understand weekends still matter - people get penalty rates because they lose out on precious time spent with their family," she said.
UnionsWA secretary Meredith Hammat said the plan meant people would have to work not just unsociable hours, but more hours to take home the same pay.
Mr Barnett took a swipe at the unions, saying they should "fess up" about signing enterprise bargaining agreements with big retail chains that had far lower penalty rates than those paid by small businesses.
"So big business has dealt with it in cahoots with the unions - good luck to them - they've come to more sensible arrangements," he said.
"It's the small businesses that really struggle."
WA opposition leader Mark McGowan said Australia had a long history of rewarding people for working difficult hours, particularly those on low incomes.
"And I don't think that should change," he said.
