“Out of touch”: Retail associations slam Fair Work Commission’s decision to raise pay for junior workers

Retail Award

Source: Unsplash/Korie Cull.

Retail businesses will need to pay some junior staff a higher wage, following a Fair Work Commission decision on Wednesday.

The commission decided that junior retail workers, under 21 years of age, on level four or above of the Retail Award, will be paid the same as the adult rate —provided they have worked for their employer for six months.

The commission rejected the Shop, Distributive and Allied Employees Association’s request to change the pay of all junior workers on level one or higher of the Retail Award to the higher, adult rate.

Evidence from a range of employers and workers in the retail industry was heard by the commission, which focused on their experiences of level one of the award.

Matthew James, a 20-year-old casual employee at The Reject Shop, said his regular duties were the same as his older colleagues. James also said he was concerned that his employer would reduce his hours if his wage increased.

Kirralee Read, the owner of a Bakers Delight store in Victoria, told the commission that her business has 25 employees and 14 are under the age of 21. Read said that if the rate of her junior staff increased to 100% of the adult rate, the annual wages bill would rise by 1.9%.

In its decision, the commission acknowledged that many retail workers are dependent on the award and receive low wages, with 20-year-olds being among the lowest paid.

Based on the evidence and material received, the commission found:

  • A significant number of employees in the retail industry who are under the age of 20 have at least three years of experience;
  • There is not much difference between the work of 20-year-old employees and 21-year-old employees in the retail employee level one classification under the Retail Award; and
  • Most employees in this classification become proficient at their roles after about six months of employment.

The commission said the changes would result in “moderate” costs for businesses and would not have “a significant negative impact” on business expenses.

However, the Australian Retailers Association disagreed, saying the decision would raise the cost of junior employment at a time that many retailers are “fighting for survival”.

“We are in the first recession for almost three decades and it’s disappointing to see the Fair Work Commission continue to elevate the costs of employing staff,” Australian Retailers Association chief Paul Zahra said.

“This, unfortunately, demonstrates the FWC are out of touch with the prevailing economic conditions facing retailers.”

Zahra acknowledged that the larger group of level two and three employees would not be affected by the commission’s decision.

More than 10 parties made submissions to the commission including the Shop, Distributive and Allied Employees Association, the Australian Council of Trade Unions, the Australian Retailers Association, the Australian Chamber of Commerce and Industry and the Commonwealth of Australia.

Under the current award, a 20-year-old with less than half a year of experience earns $776.25 a week, whereas an adult earns $862.50.