Businesses push back on union’s bid to abolish junior rates for 500,000 workers

Businesses have come out swinging against a union bid to scrap junior wage rates for half a million workers, claiming it will put employers off hiring younger workers and lock under 18s out of an opportunity to land their first job.

The Australian Council of Trade Union and the Shop, Distributive and Allied Employees Association surprised many on Thursday when they lodged the bombshell legal action with the Fair Work Commission that will create ripple affects across the retail, fast food and pharmacy sectors.

The action call for workers aged 18 and over under award arrangements to be paid the full rate of adult pay. The union also wants to increase junior rates of pay for workers aged 15 to 17.

But the Australian Chamber of Commerce and Industry argued first jobs at junior pay rates were “a crucial stepping stone in their development”, Australia’s largest and most representative business network said.

ACCI chief of policy and advocacy David Alexander said it was an unrealistic proposal that will make it almost impossible for young workers to get their first job.

“Calls to abolish junior pay rates is another example of the usual ignorance of economics from unions,” Mr Alexander said.

“Having no junior pay rates would make hiring young people far less attractive to businesses.

“Taking on a worker with minimal experience requires extra risk and extra effort — they do not have the work or life experience that older adults have.

“This would be catastrophic for young workers, especially in retail, who would struggle to get a start in the workplace.”

Australian Retailers Association, the nation’s peak retail body, said the legal action had been rushed through without any industry consultation.

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

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

Mr Zahra added it had concerns about the impact this change would have on retailers experiencing a cost-of-doing-business crisis, particularly after the FWC this week revealed millions of workers on minimum and award wages will get a 3.75 per cent pay rise from July.

SDA national secretary Gerard Dwyer said most retail and fast food workers had many years of experience in the industry by the time they were 18, and yet they were paid 30 per cent less than the full minimum.

“In the eyes of the law, 18, 19 and 20-year-olds are adults. They can vote, drink alcohol and join the army — why are they paid as juniors?” he said.

“If you’re of adult age, you should be paid an adult wage.”

ACTU secretary Sally McManus said the cost of living and housing disproportionately fell on young workers.

“Wage discrimination in the forms of youth wages, discriminatory super rules, and forms of unpaid work such as internships, are compounding economic insecurity for young people,” she said.

“The cards are already so heavily stacked against young workers. It is unfair for them to have to work harder and longer to pay the same bills as other adults.”