More than half a million young workers could get a pay bump under a union plan to abolish junior pay rates, sparking warnings of job losses and claims of union overreach by industry groups.
Unions filed a “groundbreaking” application on Thursday asking the industrial relations watchdog to abolish “discriminatory” junior rates in retail, fast food, pharmacy and apprenticeship awards and pay the full adult rate for workers 18 and over.
Workers in those industries aged 20 and under are paid less than the full adult wage, with 20-year-old retail workers earning 90% of the adult wage for six months before they move onto the full wage.
About 526,000 workers in the retail and food sector across Australia on junior rates could see a lift in wages if the case is successful, with benefits expected to flow onto enterprise agreements.
However, retail and industry groups say the changes are unsustainable and will negatively impact young workers who already face more than double the unemployment rates of other workers.
The proposed changes would increase the pay for workers under 16 to 50% of the adult award, a boost of 5 to 10%, with 17-year-olds getting a pay rise of 15%.
Shop, Distributive and Allied Employees Association national secretary Gerard Dwyer said some retail and fast food workers had many years of experience in the sector by the time they were 18.
“If you’re of adult age, you should be paid an adult wage,” Dwyer said.
“There is no justification for them being paid 30% less.”
But Australian Retailers Association chief executive Paul Zahra accused the unions of rushing the bid through without consulting with industry.
“Junior rates are used to incentivise employment of young people who are less skilled, giving them an entry point for their careers,” Zahra said.
He is concerned about the impacts the proposed changes could have on struggling mum-and-dad retailers experiencing a “cost of doing business” crisis who cannot afford another wage hike.
Unpaid internships and “sham” apprenticeships where employers engage young trainees as cheap labour and provide minimal or substandard training should be abolished, the unions argued.
About 236,000 apprentices are on the junior rates.
“Discriminatory” superannuation rules, where super is not paid to workers under 18 unless they work 30 hours a week, are also in the firing line.
“The cards are already so heavily stacked against young workers,” ACTU secretary Sally McManus said.
“It is unfair for them to have to work harder and longer to pay the same bills as other adults.
National employer association Ai Group labelled the push as unsustainable and union overreach that will impact both employers and employees.
“The union push to abolish junior and apprentice pay rates is a short-sighted plan that will hurt the very workers they are trying to help,” chief executive Innes Willox said.
A fundamental change to the workplace relations system will create a barrier for bringing in skilled workers, he said.
“It would undermine a crucial pathway to well-paid and rewarding careers for younger workers.”
National Retail Association Interim chief executive Lindsay Carroll warned the abolition of junior rates will force young workers to compete with older, more experienced candidates and risk being pushed out of the market.
The Fair Work Commission on Monday raised the minimum and award wages by 3.75% from July.
This article was first published by AAP.
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William Ton is a reporter at Australian Associated Press.
