21/03/2014 - 14:19

Retail pay boost riles industry

21/03/2014 - 14:19

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Industry groups have slammed the Fair Work Commission's ruling that 20-year-old retail workers should be paid adult wage rates, claiming it will destroy young Australians' job prospects.

Industry groups have slammed the Fair Work Commission's ruling that 20-year-old retail workers should be paid adult wage rates, claiming it will destroy young Australians' job prospects.

The FWC today granted an application by the Shop, Distributive and Allied Employees Association seeking a variation to the retail award which would enable 20-year-olds to be paid at adult rates, rather than 90 per cent of the revelant adult rate.

In considering the application, the full bench of the commission ruled that the discounted rate for 20-year-old workers did not provide a fair and relevant minimum safety net for those employees under the modern award and minimum wage objectives.

The ruling means 20-year-old retail employees who have worked for their employer for more than six months will be entitled to the adult rate of pay, with the new rates to be phased in from July 1 2014 and July 1 2015.

The commission said the likely cost impact of the variation would be moderate and would not have a significant negative impact on business costs or employment growth.

Industry groups disagreed, arguing the ruling would have a devastating effect on the retail industry.

Australian Industry Group chief executive Innes Willox said the ruling would open the floodgates for unions to seek similar wage increases in other industries.

"The emphasis should be on preserving employment in the (retail) industry, not on imposing higher costs," he said.

"Despite the commission saying that the decision does not set a precedent, undoubtedly the decision will encourage unions to pursue similar claims in other industries,”

SDA national secretary Joe de Bruyn said the union planned to push for full pay for 19-year-old and eventually 18-year-old retail workers.

“The Fair Work Commission has revealed it agrees with what we’ve been saying for a long time – that paying younger workers less than the full adult rate is an outdated and discriminatory act that needs to be rectified," he said. 

“For too long employers have been getting away with paying workers less than what they deserve. It’s fantastic that the Fair Work Commission has recognised that. We can now look towards putting this into practice in the industry."

Australian Retailers Association executive director Russell Zimmerman said the wage increase would severely hit retailers and change the face of employment for young workers.

“We know that youth unemployment is at its highest level in 11 years, and with the unions case to remove junior wage rates now successful, young Australians are going to really struggle to find employment and support themselves through their studies," Mr Zimmerman said.

“What retailer is going to employ a young Australian without any experience in the industry, when they can employ someone a few years older with more experience for exactly the same wage? This decision will prove detrimental to both employers and employees."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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