Businesses Call for Flexible Penalty Rules for Remote Workers

Employers are asking the government to introduce more flexible penalty rate rules for remote workers as part of ongoing talks on improving productivity.

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Pick & Scroll News
June 02, 2025

Employers are asking the government to introduce more flexible penalty rate rules for remote workers as part of ongoing talks on improving productivity. However, critics argue that such changes could weaken worker protections. These discussions have begun with Australia’s new industrial relations minister, and business groups claim that current regulations have not kept up with the rise of remote work.


The way people work is changing quickly, and in many industries remote setups are now standard. Despite this, industrial awards that establish minimum pay conditions still reflect an era when most employees worked fixed hours at a central location. Business leaders believe Australia must update these rules, especially in relation to penalty rates and flexible schedules, to help lift stagnant productivity.


Three test cases are already before the Fair Work Commission. These cases propose easing rules on overtime and time tracking for remote staff in retail, administration and finance, where many employees earn more than minimum award rates. One proposal would allow employers to redefine what ""ordinary hours"" mean in work-from-home settings, letting workdays be more flexible without automatically triggering penalty rates.

Employers are advocating for award adjustments that fit today’s remote work reality while keeping essential safeguards. Yet government commitments to protect penalty rates have raised doubts about how much reform is possible. It is also unclear whether pending test cases would be affected by any new policy direction.


The larger question is how to maintain the productivity gains of remote work, such as reduced commuting, while preserving workers’ rights. During the early stages of the pandemic, temporary rule changes allowed more flexibility and reduced penalty costs. These measures are now being reassessed by the government and unions. Data from both the Productivity Commission and the Fair Work Commission shows that remote work can improve productivity when blended with some time in the office.


As national consultation continues, businesses want to ensure that remote work remains practical and efficient without being confined by outdated legal structures.