Businesses warn against push to remove junior pay rates

Retailers and restaurant owners have warned a new push by the ­national small business advocate to remove junior rates of pay will increase costs and contribute to youth unemployment.

In its submission to the Productivity Commission’s inquiry into the workplace relations framework, the Office of the Australian Small Business Commissioner urges consideration of a proposal to remove junior pay rates for those of voting age and older.

It is a position also held by the nation’s largest union — the Shop Distributive and Allied Employees Association — with national secretary Gerard Dwyer telling The Australian that18-year-olds received no discount on rent or groceries and so deserved the full adult wage.

Last year, the industrial umpire granted an SDA application to scrap junior rates for 20-year-old retail workers, with the full adult rate being phased in from July this year.

The ASBC submission urges the Productivity Commission to “consider aligning the adult age in the workplace relations system with the legal adult age in Australia” rather than “deeming adulthood to commence at 21”.

“This will likely reduce the administrative complexity of the workplace relations system in regard to wages as it will remove the pay levels for 18, 19 and 20-year-olds across the various modern awards,” the submission says.

Yesterday Small Business Minister Bruce Billson said he would not offer a “running commentary” on various submissions.

But Restaurant & Catering Australia chief executive John Hart said junior rates were “absolutely vital”.

“I find it quite unusual ... It would no doubt put a cost on business,” he said.

“The problem is we’ve had a system where junior rates have ­applied to 21 for a long time now. This is one of the only concessions we have left.”

Australian Retailers Association executive director Russell Zimmerman said junior rates encouraged employers to take on younger workers and train them.

“If we had 18-year-olds being paid the same as adults you will get a much greater spike in youth unemployment,” he said.

“The insurance companies will always charge a higher fee to, say, an 18, 19 or 20-year-old driver …. These young adults have not reached maturity and the reason we have staged those rates is so they can progress and work through that system.”

Council of Small Business of Australia head Peter Strong said removing junior rates of pay was counterintuitive.

Source:  The Australian - 8th April 2015