The move to slash Sunday penalty rates could face a legal and political battle, with Opposition Leader Bill Shorten vowing to stop the cuts.

The commission today announced Sunday and public holiday penalty rates would be reduced for full-time and part-time workers in the hospitality, retail and fast-food industries.

Sunday penalty cuts: Full and part time Casual Retail 200pc down to 150pc 200pc down to 175pc Hospitality 175pc down to 150pc No change Fast-food 150pc down to 125pc 175pc to 150pc Pharmacy 200pc down to 150pc 200pc to 175pc

The public-holiday cuts will come into effect from July 1, while timing for the Sunday penalty rates changes is yet to be confirmed.

Mr Shorten said his party would move to change the laws the Fair Work Commission operate under if the organisation went forward with the cuts.

"We will not stand by and allow the penalty rates of all Australians, millions of Australians, be put on the chopping block," he said.

"We will do everything in our power, in the Parliament and in the courts, to remedy this bad decision."

During the election campaign, Mr Shorten would not promise to intervene to protect Sunday penalty rates, before firming up a position last month, when he vowed to introduce legislation protect penalty rates.

This change of position follows repeated calls from the union movement for Labor to commit to introducing legislation on the issue.

Employment Minister Michaelia Cash criticised the Opposition's response to the announcement, saying the public were being "blatantly misled".

"I am very disappointed already that a scare campaign has already been started," she said.

"I am already receiving emails stating that Sunday penalty rates have been abolished. Shame on those who have instigated this scare campaign."

Senator Cash dismissed reports nurses and emergency services would be affected by the announcement, saying the commission had "no intention of this decision flowing on anywhere else".

Numerous Coalition backbenchers had voiced their support for reducing Sunday penalty rates prior to the decision, but Prime Minister Malcolm Turnbull said the party would respect and accept whatever decision the Commission made.

That line has been reinforced by Finance Minister Mathias Cormann on numerous occasions.

The decision had been delayed by the commission to avoid coinciding with the election campaign, though politicians continued to cite the review in their campaigns.

The issue became so sensitive that South Australian senator Nick Xenophon threatened legal action over ALP advertising claiming he supported cuts to penalty rates.

The union for hospitality workers, United Voice, has lobbied the Coalition and Labor on penalty rates since 2015, and has often been seen picketing outside parliamentary offices.

Greens call on Labor for support to stop cuts

Greens MP Adam Bandt said he would introduce legislation to stop the cuts, as he foreshadowed during the election campaign.

In a statement, Mr Bandt described the decision as a "body blow" for workers.

"If you work shifts on Sunday or public holidays to help pay the rent or support you through your study, this cut will hurt," he said.

"Coffees won't get any cheaper on Sunday, but young people will find it harder to pay the rent."

Mr Bandt said he would seek the support of Labor.