By Andrew Brown in Canberra

Workers could soon be putting in fewer hours on the job without losing pay under a proposal by Australia’s peak union body.

The Australian Council of Trade Unions (ACTU) has called for the weekly number of hours worked by full-time employees to be reduced from 38 to 35.

Ahead of an appearance at a parliamentary inquiry into national employment standards, the ACTU will argue for reduced working hours, which could include a four-day week.

If a four-day work week is not possible, sector-specific alternatives should be proposed.

ACTU president Michele O’Neil said a reduced working week would counter large amounts of unpaid hours employees work.

“Australians have been working record-long hours for some time now – currently around an average of four and a half weeks of unpaid overtime each year,” she said.

“Working people work to live, not live to work, and the results of trials tell us more time for workers boosts productivity, reduces burnout, improves their health and retention.”

The council has also called for an increase in annual leave for workers, which it said would make up for the unpaid leave employees performed.

Unions will press for an extra week of annual leave – up from four to five weeks per year – and from five to six weeks for regular shift workers.

Ms O’Neil said the change would be the biggest shift to annual leave since the 1970s.

“We’ve had annual leave stuck at four weeks for the last 50 years while much of Europe has already moved to leave beyond four weeks,” she said.

“Working Australians need to benefit from higher productivity and technological advancement, instead of watching all of the proceeds flowing through into corporate profits and executive bonuses.”

The ACTU unveiled its annual leave increase push in March, with Treasurer Jim Chalmers saying the government was not considering an extra week.

Business groups strongly opposed the proposed annual leave increase, with the Business Council’s chief executive Bran Black saying a one-size-fits-all approach was wrong.

“With weak productivity growth, inflation rising and living standards under pressure, this proposal does nothing to address these real challenges,” he said.

“This proposal assumes businesses can simply absorb the cost of extra leave without any improvement in productivity.”