ACTU, SDA launch application to scrap junior pay rates for half a million young workers

Unions have launched a landmark bid to abolish the junior pay rates for half a million young workers.

Unions have launched a landmark application to the workplace umpire, demanding the abolition of junior pay rates for more than half a million 18 to 20 year olds working across the fast food, pharmacy and retail sectors.

The action, launched by Australian Council of Trade Union’s secretary Sally McManus and the Shop, Distributive and Allied Employees Association national secretary Gerard Dwyer, was lodged in the Fair Work Commission on Thursday.

Under workplace rules, employees younger than 21 are not paid the full rate across the General Retail Industry Award, Fast Food Industry Award and Pharmacy Industry Award. Those aged 20 are paid 90 per cent of the award rate, 19-year-olds receive 80 per cent and 18-year-olds get 70 per cent.

ACTU secretary Sally McManus and SDA national secretary Gerard Dwyer lodged the application in the Fair Work Commission. Picture: NCA NewsWire/Supplied.

The unions’ bid seeks to lift the pay rate of this cohort to be in line with the full award rate.

For workers under 18, the proposal argues 17-year-olds should receive 75 per cent of the award rate, up from 60 per cent, while workers 16 and under should receive half the award rate, up from 45 per cent.

Speaking from Adelaide where the ACTU is hosting its triennial conference, Ms McManus said young workers should receive the same pay rates when the cards were already “heavily stacked” against them.

“Young people don’t get discounts on their rent or youth grocery bills, so why should they get youth wages?” Ms McManus said.

Her comments were supported by Mr Dwyer, who argued young Australians faced wage discrimination because of their age.

“By the age of 18, most retail and fast food workers have many years experience in the sector, there is no justification for them being paid 30 per cent less,” he said.

While not included in its application to the commission, the ACTU is also advocating for an overhaul of superannuation regulations such that businesses will be required to pay super on every hour worked for employees under 18. Currently, employers are not required to make the compulsory 11 per cent super contribution unless a 30-hour threshold is reached.

If successful, the proposed award changes would also flow through to collective agreements with junior rates, including workplace deals at the major supermarkets.

The application is expected to be fiercely contested in the Commission by employer advocates, with Australian Retail Association boss Paul Zahra arguing the change would have a disemployment effect on young workers.

“Junior rates are used to incentivise employment of young people who are less skilled, giving them an entry point for their careers,” Mr Zahra said.

Australian Retailers Association chief Paul Zahra argued small business would struggle to absorb another wage increase. Picture: NCA NewsWire/ Gaye Gerard

“Without these rates, these young people may otherwise struggle to compete against older, more experienced applicants.”

The ARA boss also argued that another pay hike would hurt businesses when the 3.75 per cent minimum and award wage increase awarded by the Commission on Monday was already slated to commence on July 1.

“Many employers in the retail, fast food and pharmacy sectors are small businesses – mum and dad operators – who are severely challenged and simply can’t afford another wage hike,” he said.

Ai Group chief Innes Willox agreed that scrapping junior rates would remove employers’ incentives to hire young and inexperienced workers just as jobs market was showing signs of deteriorating.

“The junior rates proposal is a clear example of unsustainable union overreach that is entirely out of touch with economic reality and will be deeply problematic for both employers and employees,” Mr Willox said.

The Business Council of Australia (BCA), which has major supermarkets Coles and Woolworths among its members, warned fewer jobs and less hours could potentially become available as a result of the policy.

Both grocery giants pay junior rates.

“At a time when there are record insolvency levels and customers curbing their spending, now is not the time to add more hurdles for businesses with new costs added to their operations,” BCA boss Bran Black said.

Originally published as ACTU, SDA launch application to scrap junior pay rates for half a million young workers