FWC Reviews Application to Abolish Junior Pay Rates for 18-20 Year Olds

The Fair Work Commission (FWC) is currently reviewing an application to abolish junior pay rates for employees aged 18 and over in sectors such as retail, fast food, and pharmacy. This significant change, proposed by the Shop, Distributive and Allied Employees' Association (SDA), could affect nearly half a million young workers and potentially influence similar provisions in approximately 70 other awards.

Current Junior Pay System Explained

Under current provisions, workers under the age of 21 in these industries receive a percentage of the adult award rate based on their age. Specifically, 18-year-olds are paid 70 percent, 19-year-olds 80 percent, and 20-year-olds 90 percent of the full award rate. These rates apply to sectors characterized by a high proportion of youth employment.

Arguments for Abolishing Junior Rates

The Australian Council of Trade Unions (ACTU) and the SDA are advocating for the abolition of these junior pay rates for individuals aged 18 and above. ACTU Secretary Sally McManus stated that 18-year-olds are legally recognized as adults for various purposes, including voting, driving, and military service, and argued this recognition should extend to wages. She drew a comparison between employer arguments against the proposed changes and historical opposition to equal pay for women. SDA National Secretary Gerard Dwyer confirmed the application aims to secure adult pay rates for those 18 and older, specifically seeking to vary the General Retail Industry Award 2020, Fast Food Industry Award 2020, and Pharmacy Industry Award 2020.

One worker, Ben Walker, a 20-year-old supermarket employee with four years of experience, described paying adult expenses while receiving a junior wage. He noted a perceived disparity with older, less experienced colleagues, highlighting the challenges of managing adult responsibilities on a junior wage.

Industry and Employer Concerns

Employer representatives and industry bodies have expressed concerns regarding the potential economic effects of abolishing junior pay rates.

Innes Willox from Ai Group argued that substantial increases in staff costs could lead to reduced employment opportunities for young people. He stated that junior rates account for new entrants to the workforce learning skills and their contribution.

The Australian Retailers Association (ARA) also stated that such changes could make it more challenging for young Australians to enter the workforce, potentially leading employers to favor more experienced applicants. The ARA noted that the retail sector is a significant employer of young Australians, with over 500,000 workers under the age of 24.

Woolworths, a major employer of young people, stated that the junior pay rate system has facilitated youth employment pathways for decades. The company, which pays full adult rates from age 20 and for supervisory roles, called for any potential changes to be introduced sustainably and responsibly.

FWC Case Status

The Fair Work Commission's full bench heard evidence related to the application during October and November. A decision on the matter is pending, and no release date has been set. The outcome of this case could potentially influence other awards that include provisions for lower pay for younger workers.