Retailers worried about union push for higher 20-year-old employee wages

Retail employers are concerned about a case before the Fair Work Commission this week that could see them hit with higher wages for employees aged 20 years old.

The Shop, Distributive and Allied Employees Association (SDA) – which represents 230,000 retail members nationally – is standing before a full board at the Fair Work Commission to fight for 20-year-old retail employees to be paid the full adult wage.

Australian Retailers Association executive director Russell Zimmerman said this morning retailers he had spoken to shared his “grave concerns” about the union’s case. He says the higher wage could impact employment opportunities for this age bracket.

“It is both big and small retailers that are worried,” he told SmartCompany.

“I spoke to a retailer yesterday who has two stores and about 15 to 20 staff with a high-service product. He said, if I have to put new people on, I will choose mature people with the expertise and know-how.”

Zimmerman says the store owner currently hired younger staff that he was willing to train, as the current wage made this affordable.

He argues the timing of the case was poor for retailers, already battling July 1 raises to the carbon tax, employee superannuation payments and the fourth transition of the modern award penalty rate.

“It’s been a raft of changes in the industry. I don’t think the industry can stand the costs,” he says.

SDA national secretary Joe de Bruyn told SmartCompany in March, when the campaign first launched, 18 to 20-year-old adults had the right to be paid equally to their retail colleagues.

“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 said.

“The loophole that allows retailers to pay young adults just a percentage of what they deserve is antiquated and discriminatory. There’s no doubt it needs to be removed.”

This afternoon de Bruyn told SmartCompany he was happy with the start of the case, with ten SDA witnesses appearing before the FWC on Monday and more today. 

“The bench were actively interested in our young witnesses,” he says. “I think this is an issue whose time has come. I think the FWC will consider it carefully. They know it is a major historic case,” he says.

He said the ARA and retailers who complained about the case were “exaggerating” retail business costs and that costs were not significantly worse than at other times.

The SDA is pushing for the weekday wage for 20 year olds to increase from $16.19 per hour to $17.98. The adult wage currently comes into effect when employees turn 21. If successful, the SDA will turn its attention to increasing 18 and 19-year-old employees’ wages.

The case began yesterday in Melbourne and will run all week before reconvening at a later date.