Liberal senator Eric Abetz has dramatically intervened in the penalty rates debate, calling for workers' existing rates to be protected, and creating a fresh political headache for Prime Minister Malcolm Turnbull.
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In an opinion piece for Fairfax Media, Senator Abetz has publicly called on the Fair Work Commission to protect existing pay rates so "no worker is worse off" and only new employees would be paid reduced rates on Sundays and public holidays.
Senator Abetz said he supported the landmark decision to cut penalty rates for certain workers in the retail, hospitality and tourism sectors because it would help small business and create jobs, but the decision "had to be implemented in a fair and equitable manner".
His comments will likely be seized on by Labor, which has demanded Mr Turnbull intervene to stop the pay cut.
"The Fair Work Commission should use the powers that it already has to grandfather current employees' salary rates so that only new employees are covered by these new salary rates. The Fair Work Commission, under current law, already has the ability to do this," Senator Abetz writes.
"This approach would ensure that no worker is worse off while allowing new opportunities for the unemployed and especially for young unemployed people."
In its draft ruling, the commission said it did not favour "red circling" which would, like grandfathering, preserve current penalty rates for existing employees.
The former Abbott government employment minister added that the Howard government had always ensured workers were no worse off under industrial relations changes until Workchoices - and had learned a harsh lesson from that episode.
Senator Abetz also appeared to criticise the government's handling of the issue, noting "the argument that it is an independent umpire's decision and that Bill Shorten said he would respect the decision but has changed his mind are all interesting and very valid debating points, but they are of cold comfort to our fellow Australians who face the prospect of a cut in their existing wages".
The Productivity Commission has also called for delay, telling a Senate hearing on Wednesday night that hospitality workers should know what's coming and be given 12 months to consider changing jobs.
"It's an industry with very high levels of turnover and good prospects for changing jobs," said Commission chairman Peter Harris, noting that some employers might choose to keep penalty rates as they were in order to retain staff.
For a third consecutive day, Labor used Question Time to attack the Turnbull government over the ruling, taunting the Prime Minister for saying he supported the penalty rates decision and demanding the Coalition stop it.
"Will the Prime Minister please advise the 700,000 Australians who rely upon these penalty rates whether he will intervene to stop these pay cuts?" Mr Shorten asked.
But Mr Turnbull accused the Opposition Leader of hypocrisy for previously promising to respect the independent umpire's ruling, and cited numerous examples of workplace agreements Mr Shorten signed off on while national secretary of the Australian Workers' Union, that reduced penalty rates.
"The only person in this room... There may be some others in the Labor side, the only person who has actively cut penalty rates is the Leader of the Opposition. He has done it again and again and again," Mr Turnbull said.
Labor again targeted Liberal MP Ann Sudmalis' suggestion the penalty rates cut was a "gift" to young people who were unemployed; the Gilmore MP cried during Question Time after her comments were raised again. She did not respond to requests for comment.
The Fair Work Commission's ruling, handed down last week, will effect an estimated 700,000 workers in the retail, hospitality and tourism sectors and could cost them up to $77 a week in lost wages.
Employment Minister Michaelia Cash has said the government was considering making a submission to the commission on how to implement the decision. This submission is due by March 24.
- with Peter Martin
