In late March the Fair Work Commission (FWC) announced their decision to abolish junior pay rates for young adult employees working in retail, fast food and pharmacies.

FWC deputy president Terri Butler said while making the decision it was considered whether there was any difference in the value of work performed by junior employees and other employees in the same classifications under the same awards.

“We have been particularly interested in the extent to which junior rates serve or do not serve the interests of children and young people,” she said according to abc.net.au.

“Young teenagers who are trying to get their first job usually wanting to balance work with secondary education, can benefit from being able to accept discount rates compared with older people doing the same.

“They are in a position of particular vulnerability and greater labour market disadvantage.”

Under the changes, which are due to come into effect in December, it’s estimated approximately half-a-million workers will be eligible for the pay rise provided they have been with the same employer for six months.

However, the Australian Retail Council (ARC) said the decision would add to cost pressures already on retailers.

ARC chief executive officer Chris Rodwell said while this would be a financial for businesses, the decision recognises the need to maintain pathways into work and the realities facing businesses operating in a challenging economic environment.

“Junior rates have served Australia well for generations. They recognise that younger workers often have little or no workplace experience and help employers, particularly small businesses, give young people their first opportunity,” he said.

“Crucially junior rates for workers aged 17 and under will remain in place. That’s important. Early work experience is critical and we cannot afford to make it harder for young Australians to get their first job.

“The move to 100 per cent adult rates is linked to experience with the same employer, and the long transition period gives businesses time to adjust. That is a practical approach that reflects current trading conditions.”

According to ARC small retail businesses have expressed strong concerns that removing junior rates will increase labour costs and make it harder to employ young people entering the workforce, while some small retailers said they could struggle to remain viable as a result of such a decision.

“Retail has long been the training ground for Australia’s future workforce,” Mr Rodwell said.

“Small retailers told us clearly that junior rates help them take a chance on young people who may not yet have experience.

“Many retailers already pay above-award rates to retain skilled young employees as they gain experience and take on more responsibility. Junior pay structures have long provided a balanced pathway that supports both youth employment and business viability.

“The reality is, this decision does add another layer of cost at a time when many retailers are dealing with a cost-of-doing-business crisis.”