UNIONS have urged the Turnbull Government not to move to cut penalty rates, as the Productivity Commission hands a key report to the government.
The commission's inquiry into workplace relations was due too report its findings to the government this week, while the government has until March next year to release it publicly.
Despite the final report is not yet public, the Australian Council of Trade Unions called on the government to rule out cutting penalty rates for retail and hospitality workers.
ACTU president Ged Kearney said the commission's draft report had recommended cutting penalty rates to workers in those industries.
If penalty rates were cut, modelling by the McKell Institute for the ACTU showed the impact in regional Australia could be as high as $1.55 billion in lost wages and disposable income.
But business groups have argued cutting penalty rates would help weekend businesses like cafes and shops could continue to operate.
While Fair Work Australia, and not the government, is responsible for setting penalty rates, Ms Kearney said the commission's report could be used in "building the case" for cutting penalty rates.
The government has previously pledged not to make any changes to reform workplace relations laws in its first term, a position that has not changed since the change of Liberal leader.