Employers should respect their employees' private religious practice, Prime Minister Scott Morrison has said, in a new intervention after the fallout from the sacking of rugby player Israel Folau.

Mr Morrison made the comments as he confirmed he would begin consulting on a religious freedoms bill this week and gave no firm timeline on when the already-delayed legislation would be introduced other than "this year".

Folau, a staunch Christian, is suing Rugby Australia over what he says is his unfair dismissal, after he paraphrased a passage from the Bible to say in an Instagram post that "hell awaits" homosexuals unless they repent.

Prime Minister Scott Morrison on 7.30.

Rugby Australia said Folau broke the terms of his contract and, during the campaign, the Prime Minister said it was a matter of contract law. However, Folau and his backers say the issue is a totemic one of free speech and religious freedoms and whether or not an employer can curtail religious expression.