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Pay rate changes for young retail workers

FWC handed down its decision on junior rates in the General Retail Award 2020.
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Pay rate changes for young retail workers

Pay rate changes for young retail workers

30 November 2020

By Australian Business Lawyers & Advisors

On 25 November 2020, a full bench of the Fair Work Commission (FWC) handed down its decision on junior rates in the General Retail Award 2020 as part of the 4-yearly review of modern awards. The result of the case is that junior rates will no longer apply in the retail award at levels 4-8. Junior rates at levels 1-3 have been maintained.

Australian Business Lawyers and Advisors (ABLA), on behalf of ABI and the NSWBC, contested the Shop, Distributive and Allied employee’s (SDA) application to remove junior rates of pay from all levels of the award bar level 1.

The SDA claimed that the award modernisation full bench erred in applying junior rates to all classifications given that the major pre-modern award did not provide for junior rates above level 1, the retention of junior rates is inconsistent with the principle of equal renumeration and that clause 17.2 failed to provide for a fair and relevant safety net.

ABLA was successful in defeating the SDA’s claims with the full bench rejecting the SDA’s various contentions and finding that it had failed to establish its case.

This outcome represents a significant win for the General Retail Industry which has been significantly impacted by the COVID-19 pandemic. The case means that employees at levels 1, 2 and 3 (where the vast majority of junior employees are engaged) can still be engaged at junior rates.

Notwithstanding its decision to reject the SDA case, in making its decision, the full bench noted an anomaly included in the retail award whereby level 4 employees (trade qualified) may be eligible to receive junior rates. The full bench determined that this anomaly required rectification and made subsequent changes to levels 4 and above of the award, removing junior rates.

It was noted by the full bench that very few junior employees are engaged at levels 4 and above. This accords with our organisation’s understanding.


Amendments

Clause 17.2 of the retail award will be varied to provide that junior rates only apply to classification levels 1 to 3.


When the changes will be effective

The FWC has proposed that these changes to the award will be effective in the first full pay period on or after 1 February 2021 in alignment with the annual wage review increase for the General Retail Award 2020. The precise transition date will be finalised shortly.

This was first published on Australian Business Lawyers & Advisors.

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