In in his first public appearance since resigning last month, Mr Watson used a speech at the Centre for Independent Studies on Tuesday to criticise his former boss, Fair Work Commission president Iain Ross.

Mr Watson suggested Mr Ross had presided over an administration that marginalised commissioners like himself with a business background in favour of others who, like Mr Ross, had a union background.

The national safety net was set higher than other countries, he said, and was unusual by international standards.

He said the entire safety net including minimum wages, allowances, leave entitlements and penalty rates needed review.

"My view is that a review of the entirety of the safety net, Sunday penalties being only one part of that, is a useful thing to do and it should be conducted in an expert manner and in a comprehensive way," Mr Watson said.

"We have a very high level of minimum wages. In addition to that we have higher minimums for skilled employees above the minimum rate, which is unusual by international standards.

"Then we have all sorts of add-ons, such as allowances and penalty rates, which are also unusual and leave entitlements."

Mr Watson said during the global financial crisis, youth unemployment rose in Australia.

"But it didn't go down after the end of the GFC as it did in other countries. It stayed at quite a high level," he said.

"I think the level of the safety net that applies in a proscriptive way in entry level employment must be a factor in that."

Commission dysfunctional

A former partner at law firm Freehills, Mr Watson was the last remaining Coalition appointee in a senior role at the commission and a strong dissenter in favour of business.

He declared the Fair Work Commission was "partisan, dysfunctional and divided" when he announced his resignation from the Fair Work Commission in January.

He and another former commissioner Michael Roberts had agreed there was a need to review Sunday penalty rates for restaurants. But he said the commission majority had not agreed. The controversial changes that were proposed in a landmark commission decision last month were more "modest" than he had suggested.

"In the restaurants case Michael Roberts and I said that there was a need to review the appropriateness of penalty rates in contemporary society and that balancing of considerations such as employment opportunities," he said.

Mr Watson said his analysis of full bench decisions from 2013 to July 2015 found that the presidential members most frequently allocated to the most important decisions had a union background as opposed to a business background.

"The practice of favouring some members and marginalising others in full bench allocations, similar to the NSW commission A and B team approach is well known to close observers of Fair Work Commission practice," he said.

"However, the practices are heavily camouflaged and difficult to expose. It is very easy, for example, to allocate members to insignificant Full Bench matters and create the appearance of equal treatment."

Mr Ross was contacted for comment.

Aerocare justified

In response to a question about his decision in favour of an enterprise agreement which allowed Australian aviation services company Aerocare to split shifts for aviation workers, Mr Watson said he had considered the workers were better off overall.

In his decision of 2013, Mr Watson said the minimum three-hour shifts under the Aerocare enterprise agreement was a "disadvantage" to workers compared to the minimum four-hour shifts required under the Award.

"I do not believe that a three-hour work period followed by a subsequent one-hour unpaid meal break is consistent with the award requirement that employers roster part-time employees for a minimum of four consecutive hours on any shift or the minimum payment of four hours for casuals," he said.

"I propose to consider this change as a detriment to both part-time and casual employees."

However, considering all the circumstances, Mr Watson said he was satisfied the advantages within the enterprise agreement outweighed the disadvantages.

On Tuesday, Mr Watson said the better off overall test requires a finding that no employee is worse off overall compared with the terms of the relevant Award.

Coles failed

"There could well be some detriments in certain respects but there could also be benefits in other respects and you need to make an assessment on an overall basis," he said.

"Many agreements in retail, fast food and similar industries are designed to soften the impact of award provisions in retail for example, to flatten penalties across the week rather than have them in peaks on weekends.

"Those sorts of agreements need to be scrutinised very closely and an assessment needs to be made of the overall impact on every group of employees affected by it. And that was the basis for my approval of that agreement.

"The company engaged senior counsel and extensive material to demonstrate that all employees were better off overall even though in some respects there were some detriments compared to the Award."

Mr Watson said if employers believe the better off overall test is inappropriate, "they need to seek a change to the law, but in the meantime the law needs to be applied".

A full bench decision he presided over had overturned an agreement for Coles workers because it did not comply with the test.

"It appears in that Coles case that the union and Coles had been prepared to see favourable treatment to some employees as a trade off of unfavourable treatment to others," he said.

"That's not the proper application of the test. Every employee must be better off overall."