Claiming a victory, Australian Industry Group chief executive Innes Willox said the decision was an "important step in the right direction of freeing up the award system to remove barriers to employers and employees agreeing on workplace flexibilities of benefit to both parties".
The AIG successfully argued that a large number of employees value time off more than extra pay, particularly those with caring responsibilities.
It also argued that individual employees are in the best position to decide whether they value time off more than payment for overtime and that it is not appropriate for awards to stop employees from making that choice.
The Fair Work Commission has developed a clause that provides for one hour of time off for one hour of additional time worked.
The commission rejected union claims for the clause to provide for time off equivalent to the higher overtime penalty rate.
Unions NSW Secretary Mark Lennon said the decision was another "example of employers claiming a win for flexibility, when it actually equates to a real loss for workers".
"If this was a genuine win for workers, they would not be disadvantaged by the process and would be receiving time off in lieu the equivalent to their overtime rates, instead workers will not be fairly compensated for working long and unsociable hours," Mr Lennon said.
"While we support the ability of employees and employers to negotiate flexible working arrangements to balance the commitments of work and family life this should not be at the expense of wages and conditions that people depend on to put food on the table."
Mr Willox said the new clause would be introduced into more than 90 per cent of awards that will now provide the so called "time for time" arrangements. About ten per cent of awards already provide a provision for time in lieu and some provide arrangements in line with higher penalty rates for weekend work.
The full bench decision is part of the Fair Work Commission's four-yearly review of modern awards.
Tim Ayres, Australian Manufacturing Workers Union NSW secretary welcomed the decision in providing a "sensible framework".
He said people who wanted the flexibility of time off for family would get it. While workers saving
for a house deposit could still claim overtime pay.
"It means that workers can have a realistic prospect of being able to use the extra hours that they've worked so that they can participate fully in family life," he said.
"People will still have a right to overtime payments. This will not disturb that right. This can only happen at the initiative of the employee.
"We will be watching carefully for any employees who try to misuse the provision to steal workers' overtime."
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The AIG successfully argued that a large number of employees value time off more than extra pay, particularly those with caring responsibilities.
It also argued that individual employees are in the best position to decide whether they value time off more than payment for overtime and that it is not appropriate for awards to stop employees from making that choice.
The Fair Work Commission has developed a clause that provides for one hour of time off for one hour of additional time worked.
The commission rejected union claims for the clause to provide for time off equivalent to the higher overtime penalty rate.
Unions NSW Secretary Mark Lennon said the decision was another "example of employers claiming a win for flexibility, when it actually equates to a real loss for workers".
"If this was a genuine win for workers, they would not be disadvantaged by the process and would be receiving time off in lieu the equivalent to their overtime rates, instead workers will not be fairly compensated for working long and unsociable hours," Mr Lennon said.
"While we support the ability of employees and employers to negotiate flexible working arrangements to balance the commitments of work and family life this should not be at the expense of wages and conditions that people depend on to put food on the table."
Mr Willox said the new clause would be introduced into more than 90 per cent of awards that will now provide the so called "time for time" arrangements. About ten per cent of awards already provide a provision for time in lieu and some provide arrangements in line with higher penalty rates for weekend work.
The full bench decision is part of the Fair Work Commission's four-yearly review of modern awards.
Tim Ayres, Australian Manufacturing Workers Union NSW secretary welcomed the decision in providing a "sensible framework".
He said people who wanted the flexibility of time off for family would get it. While workers saving
for a house deposit could still claim overtime pay.
"It means that workers can have a realistic prospect of being able to use the extra hours that they've worked so that they can participate fully in family life," he said.
"People will still have a right to overtime payments. This will not disturb that right. This can only happen at the initiative of the employee.
"We will be watching carefully for any employees who try to misuse the provision to steal workers' overtime."
Read more:
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