"There are 600,000 workers who are affected by it, we understand the hardship that will cause in many of those workers' situation," Prime Minister Malcolm Turnbull said.

"But the fundamental questions is: do you have an independent Fair Work Commission that sets these rates, or not?"

Speaking on the condition of anonymity, one Liberal said those groups which for years had regarded penalty rates as a bread and butter issue, had a duty to speak up.

The Business Council of Australia supports the rates reduction but has no plans to campaign, given its members are not directly affected, a spokesperson said.

Geoff Bannister, at his Potts Point cafe, was pleased with the reduction in Sunday penalty rates. Brook Mitchell

Russell Zimmerman, chief executive of the Australian Retailers Association, said his organisation would continue to promote the decision as one good for jobs and small business but, at this stage, had no plans for any campaign. The ARA had a meeting Monday to discuss the situation.

Mr Zimmerman called on Labor to back off and "let the Fair Work Commission do its job".

Peter Strong, chief executive of the Council of Small Business of Australia, said his organisation did not have the money or resources for a campaign but would continue its public advocacy.

He said Labor's largest union, the Shop Distributive and Allied Employees Association, was hypocritical because it had negotiated enterprise bargaining agreements which in some cases had traded away penalty rates for casuals.

In 2007, the Labor-Union Your Rights at Work Campaign was devastatingly effective against the Howard government's WorkChoices policy which targeted penalty rates. The Fair Work Commission decision pared back rates in just four of 122 awards but 680,000 people will suffer a loss of take-home pay.

Labor - and many in the government - believes the government is vulnerable because it made no submission to the review and now it has no plans to back legislation to have the decision overturned.