Workers at fast food giant KFC have not been paid penalty rates for years but are no worse off due to an agreement offering a higher base rate of pay, the company argues.

At a Senate committee hearing in Melbourne on Thursday, Senator Nick Xenophon suggested the deal was far from finger lickin’ good for staff at the chicken chain.

“It’s impossible for a KFC worker who works nights and weekends to not be worse off, as there are no penalty rates,” he said.

The South Australian senator is part of the Education and Employment References Committee examining proposed changes to penalty rates amid union fears workers will be left out of pocket.

KFC spokesman Robert Phipps defended the company’s approach which he said allows flexibility and fairness for workers.

“We haven’t paid penalty rates in a very long time … coming up to about eight years we haven’t paid Sunday penalty rates,” he said.

It means that no matter what day of the week workers are able to do their shifts, all get the same remuneration, he added.

The company has an enterprise agreement with the Shop, Distributive and Allied Employees Association in place where workers are paid a nine per cent loading on top of the base rate.

KFC is one of several large employers giving evidence to the committee, along with supermarkets Coles and Woolworths.

In a submission to the committee Woolworths Group noted their enterprise agreement had expired and the company cited little prospect of negotiating a new deal that would be approved by the Fair Work Commission.

The inquiry aims to find out if large companies benefit by employing workers on an enterprise agreement that has lower penalty rates on weekends and public holidays than those set by the standard award.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.