Labor and the Greens have accused One Nation of selling out older workers, after the party flipped its vote to help pass the Coalition's JobMaker scheme.
The Senate had been poised to insist on its amendments to the hiring credit, a rare manoeuvre, after the Coalition used its numbers in the lower house to reject changes to the legislation on Wednesday.
Labor and the Greens had combined with One Nation and independent senator Rex Patrick on Tuesday to amend the Morrison government's JobMaker bill to explicitly stop businesses firing staff or reducing their hours in order to hire a new subsidised worker.
However Education Minister Dan Tehan told MPs the amendments were unnecessary as the hiring credit was not available to employers who did not increase their headcount and payroll.
"The rules will ensure the integrity of the JobMaker scheme by requiring entities to maintain sufficient records to substantiate their claim and prohibit both employers and employees from entering into arrangements for the sole or dominant purpose of obtaining the JobMaker Hiring Credit payment," Mr Tehan said.
"All of the existing rights and safeguards in the Fair Work Act for employees will continue to apply, including protection from unfair dismissal and the full range of general protections."
The bill then returned to the Senate, where Labor, the Greens and key crossbenchers - including One Nation - had indicated their changes would stand.
But Senator Larissa Waters revealed One Nation had broken away to support the government.
She said it was a "sad day for older workers".
"You just sold out your constituency," Senator Waters told One Nation senator Pauline Hanson.
Senator Nick McKim accused One Nation of doing a "secret dirty deal" with the government to change their vote.
However manager of government business Senator Simon Birmingham said no deal had been struck, despite One Nation leader Pauline Hanson meeting with Treasurer Josh Frydenberg on Wednesday afternoon.
"I will vote on what I think is right for the country and the people. I won't play your games in this place," Senator Hanson said.
"If you don't like the way I'm voting I don't care because I'm accountable to the people."
One Nation senator Malcolm Roberts said the party had reversed its position after learning of "two figures" - the unemployment rate for people aged over 35 and the rate for those under 35.
Senator Roberts said the jobless rate for under 35s was 10.4 per cent compared to 4 per cent for over 35s.
"When we get new data we have the courage and integrity to change our minds," Senator Roberts said.
Earlier, Labor leader Anthony Albanese said unless the amendment was supported, businesses would have a financial incentive to get rid of workers aged over 35.
Under the scheme, businesses will be able to receive a hiring credit of up to $200 per week for each job seeker aged 18 to 29 they take on, as part of the new scheme. Those who hire people aged 30 to 35 out of the dole queue can receive a credit of $100 per week while unemployed people aged over 35 are not eligible.
"The fact is Labor will not tolerate a circumstance whereby workers aged over 35 get done over as a result of legislation passed by this parliament," Mr Albanese said.
Mr Albanese said it was rare to have Labor, the Greens, One Nation and independent senator Rex Patrick voting in the same direction.
The first JobMaker payment would not land until February, which gave the government time to get the scheme right, Mr Albanese said.
"This isn't a political issue, it's about job security," Mr Albanese said.
"Maybe when you've got the Greens and One Nation voting together it might be pause for thought."
Greens leader Adam Bandt said without the amendment, the bill contained no protections for workers aged over 35.
"The fact this has been supported across the political spectrum should send a clear message to government," Mr Bandt said.
Mr Bandt said the failures of the JobKeeper scheme showed protections for the JobMaker scheme needed to be enshrined in law.
"What we found with the JobKeeper scheme was that unless you put in some good protections then anything the government says and promises is unenforceable," Mr Bandt said.
"We found with JobKeeper that many people were left off the JobKeeper scheme when someone else in their workplace was given it and someone else wasn't.
"If the government's gonna go ahead with this scheme in that way, those those protections have to be in law and that's the lesson that we've learned from JobKeeper."
However Prime Minister Scott Morrison accused Labor of "delaying certainty for business" by playing politics with the bill.
"Hours cannot be reduced, people cannot be let off and rehired under these arrangements," Mr Morrison told Question Time.
A Senate showdown may loom today.— Adam Bandt (@AdamBandt) November 10, 2020
If gov knocks back the important Greens/Labor amendment to the JobMaker bill that stops people being sacked, then the Senate can stare the gov down and insist on it.
Greens call on rest of Senate to join us & demand this crucial protection. https://t.co/K1eXnlyauu
Treasury officials told a Senate inquiry last week any attempt to reduce older workers' hours in order to claim the hiring credit would not be tolerated.
"In a circumstance where an older worker loses their job, or has their hours cut that would not fit within those exemptions in the Age Discrimination Act," Treasury's JobKeeper division acting division head Philippa Brown said.
The exposure draft of the legislation also contains "integrity" measures to stop businesses from artificially inflating their payroll or headcount to claim the credit.
Businesses must keep records to show their headcount and payroll has risen since claiming the credit.
However if upon review, the JobMaker commissioner finds hours have been stripped from another employee to claim the credit, the business would be forced to pay the full amount back, plus penalties.
But Shop, Distributive and Allied Employees' Association national secretary Gerard Dwyer said the commissioner would not have scope to ensure all businesses were complying with the rules, if the scheme created 450,000 jobs as promised.
"If there is an uptake of this on scale there simply won't be the resources to do that. And where do you go?" he said.
"That's why we argue that they should be access to the Fair Work Commission with a dispute resolution, including arbitration."
An amendment to bring the Fair Work Commission in to settle disputes arising from JobMaker was narrowly defeated in the Senate on Tuesday night.