On February 23, the Fair Work Commission announced Sunday penalty rates in the retail, hospitality, fast food and pharmacy sectors would be reduced by up to 25 per cent, with most of the changes to take effect from July.

But Tim Houghton of Grapevine Cafe on Brisbane Street said he would not penalise staff for working on Sundays or public holidays “when everybody else is not working”.

“We want to keep our staff,” Mr Houghton said.

“We’ve got good staff and on the weekend I just figure that they work hard, they’re entitled to it.

“To keep good staff, you’ve got to pay accordingly.”

Under the changes, full-time hospitality workers would see their Sunday rate drop from 175 per cent to 150 per cent – the equivalent of a $4.55 per hour cut.

They will also see their holiday penalty rates cut from 250 per cent (known as double time-and-a-half) to 225 per cent.

Mr Houghton said reducing Sunday and holiday penalty rates would certainly save his business money, resulting in higher profits.

But he would prefer to pay his staff more, he said, than pay more in tax when profits increased.

“They’re really happy about it,” Mr Houghton said.

“A couple of them came in and asked ‘how is that going to affect us?’ And I said ‘Well we’re not going to change anything’. I said ‘you guys are going to get paid the same as what you have always been paid’.

“I don’t want these guys to be penalised for working when everybody else is not working. Particularly on public holidays.”

The issue came before parliament on Tuesday when Labor, The Greens and independent senator Jacqui Lambie introduced a bill to invalidate the Fair Work Commission’s decision. The bill aims to protect penalty rates at their present levels and is identical to one Opposition Leader Bill Shorten introduced into the lower house on Monday. The bill is unlikely to pass through the lower house, but is designed to test where crossbenchers Nick Xenophon, Pauline Hanson and Derryn Hinch stand on penalty rate cuts.