Retailers respond to SDA’s Fair Work Commission bid on junior wage rates

Australia’s peak retail body, the Australian Retailers Association (ARA) says the Shop, Distributive and Allied Employees’ Association’s (SDA) latest bid to launch a Fair Work Commission (FWC) case to abolish junior rates for workers aged between 18-20 years of age has been rushed through without any industry consultation.

ARA CEO Paul Zahra said any changes to wage structures must be consulted on and carefully considered to maintain sustainable outcomes for both employees and employers.

“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.

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

“Given the current economic conditions, we also have concerns about the impact this change would have on retailers who are experiencing a cost-of-doing-business crisis, especially so soon after the FWC’s decision to increase award wages by 3.75% in addition to the upcoming 0.5% increase in the Superannuation Guarantee Rate.

“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.”

The SDA application seeks to abolish junior pay rates for selected employees covered by the General Retail Industry Award, Fast Food Industry Award and Pharmacy Industry Award.

“The SDA is aiming to bring these three awards in line with the Hair and Beauty Award – however that is a sector which has intensely different skills and training requirements. Comparing retail to hair and beauty is like comparing apples and oranges with core differences in how they operate, and the accredited training required.”

Mr Zahra said industry must be consulted on proposed changes of this nature.

“The ARA has enjoyed a fruitful relationship with the SDA in recent years to the benefit of employees and employers alike. In particular, the ARA has worked alongside the unions on several rounds of recent FWC applications and we have seen great mutual benefit in doing so.

“We are disappointed about the lost opportunity to input into this proposal. It makes much more sense to work collaboratively with the retail industry on changes of this nature rather than surprising us.”

The SDA launched a similar case in 2014, with the Commission’s decision stating, “The productivity of young workers and value to employers being less than that of adult employees has been long accepted by Federal and State industrial tribunals. Further, it is generally the case that the engagement of young persons will be associated with additional costs to the employer because of training and supervision needs.”

The ARA will engage constructively in the coming FWC process and seek to engage with members to ensure the views of employers – particularly small business – can be taken into account.

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