The retail industry is facing a massive push from some of the country’s biggest unions to pay an adult wage to employees aged between 18 and 20.
The Shop Distributive and Allied Employees Association, which represents employees of major supermarkets Coles and Woolworths, is planning to launch a test case to the Fair Work Commission to fight its cause.
SDA national secretary Joe de Bruyn told SmartCompany 18-year-olds are recognised legally as adults in every other way, except they are still paid below the adult rate.
“Once a person turns 18 they can vote, they can drink, they can get married without parental consent and they can sign contracts. They are an adult for every purpose except for their rate of pay. There are some industries where they get the adult rate, but not in retail,” he says.
The industry award rate mandates 18-year-olds are paid 70% of adult wages, 19-year-olds at 80% and 20-year-olds at 90%.
But Peter Strong, executive director of the Council of Small Business Owners of Australia, says changing the award rates would actually disadvantage this age bracket.
“The obvious thing is with 18 to 20-year-olds we’re talking about university and TAFE students who go and work part-time.”
“If they do a good job, they’re going to be paid adult wages because small businesses want to hold onto good employees, but to make all retailers pay them the adult wage would just force businesses to hire older, more experienced employees and not give the younger ones a go,” he says.
Small business representatives have recently been up in arms about the federal government decision to enshrine penalty rates in law and, for many, this push will be seen as a further burden.
But De Bruyn says retailers just need to look to New Zealand for an example of a country where retailers pay adult wages to workers 18 years and younger without any impact on their operations.
“I just don’t believe retailers when they say it’s going to be all doom and gloom. They pay penalty rates as they should because employees have to work at odd hours, and they should pay the adult rate of pay,” he says.
However, Strong says the impact of higher wages could be harsh.
“A lot of small businesses would be forced to close,” he says.
This test case coincides with a push by multiple unions for the increase of apprentice wages, with first-year apprentices hoping for a pay rise from $317.75 to $423.66 per week or $11.15 per hour.