Employers have blasted the Fair Work Commission’s decision to scrap junior pay rates for 20-year-old retail workers, warning the step will hurt smaller operators.
There are also claims it may further lift youth unemployment, because the pay will act as a disincentive for retailers to hire from this sector of the labour market.
Executive Director of the Australian Retailers’ Association, Russell Zimmerman, said the move would be reflected in penalty rates with retailers having to pay an extra $4.50 per hour on Sundays to 20-year-old workers. He warned the move would see employers stripped of an important incentive to hire younger people.
“I can’t express how this will cascade through the industry,” he said.
“Some of those young people that some of those retailers will employ just simply won’t get those jobs now and we know that youth employment is at an eleven year high.
“The SME sector, they are a sector that will certainly employ young people and they will put them on as extras on a Saturday morning and a Sunday morning.”
On Friday the Fair Work Commission granted an application brought by the Shop, Distributive and Allied Employees’ Association (SDA) which views the decision as the first step to delivering full pay to workers aged 18 and over.
Currently a 20-year-old worker employed on the General Retail Industry Award is entitled to only 90 per cent of the relevant adult rate. An 18-year-old is entitled to about 70 per cent while a 19-year-old is entitled to 80 per cent. The standard casual rate for an adult is currently set at $22.46.
The Full Bench of the commission found that, at the age of 20, a large number of retail workers had already had significant experience and performed duties little different to duties performed by 21-year-old workers
It ruled that 20 year olds were entitled to the full rate so long as they had worked for the employer for at least six months. The new rates are to be phased in from July with the full rate to take effect from July 2015. It found that the decision would not have a significant negative impact on business costs or the viability of employment growth
SDA National Secretary Joe de Bruyn framed the union application as an important test case and the commission’s decision as evidence that paying younger workers less than the full rate was an “outdated and discriminatory act”.
He has already signalled a further push to secure full pay rates for 19-year-old retail workers.
Mr de Bruyn said there were about 40,000 20-year-olds working in retail, although roughly 15,000 of them were on enterprise agreements.
ACTU Secretary Dave Oliver welcomed the commission’s decision and said unions would continue to fight for 18-year-olds to receive the full adult wage.
“An 18-year-old can go to war and fight for their country but if they enter the workforce they get 30 per cent less than their colleagues,” he said.
“It’s outdated policy that a young person is working side by side doing the same job in a workplace but getting paid less than the person next to them who is older”.
Australian Industry Group chief executive Innes Willox said the junior rates decision was a “blow” to the retail industry and warned the move would encourage other unions to pursue similar claims in other industries.
“A large proportion of young people obtain their first job in the retail industry. The commission’s decision to disturb the current system of junior rates risks destroying the job prospects of many young Australians”.
