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What are junior rates and why do unions want to get rid of them?

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Two major Australian unions are calling for junior rates to be scrapped for 18 to 20 year olds, calling the lower pay rates "discriminatory".
Australian unions want junior pay rates scrapped.

Two major Australian unions have called on the Fair Work Commission to abolish junior pay for under-21-year-old workers.

Young employees across the retail, fast food and hospitality industries currently earn below the minimum award wage.

The Australian Council of Trade Unions (ACTU) called lower hourly rates for younger staff “discriminatory”.

A peak business group says the proposal is “unrealistic”, while the Government hasn’t committed to supporting any award changes.

Junior rates

Employees in most industries are subject to “awards” which set out their pay and working conditions.

The Fair Work Commission, the national workplace tribunal, determines these awards.

Currently, adult award minimum wages apply to workers aged 21 and older. Anyone younger gets “junior rates”, a lower hourly rate.

For example, if a 21-year-old gets $29.04 as a waiter, an 18-year-old is paid about $16.04 per hour for the same job.

Example

Employees in most industries are subject to “awards” which set out their pay and working conditions.

The Fair Work Commission, the national workplace tribunal, determines these awards.

Currently, adult award minimum wages apply to workers aged 21 and older. Anyone younger gets “junior rates”, a lower hourly rate.

For example, if a 21-year-old gets $29.04 as a waiter, an 18-year-old is paid about $16.04 per hour for the same job.

Elsewhere

Overseas models could provide a guide on reforming junior pay awards in Australia.

For example, in New Zealand, 16 to 19-year-olds earn 80% of the minimum wage for the first six months of their job before moving on to the full minimum wage.

Most parts of Canada don’t have lower pay rates for 18-year-olds.

Unions

The ACTU has called for junior rates to be scrapped for anyone legally considered an adult.

ACTU Secretary Sally McManus said: “Young people don’t get discounts on their rent or… grocery bills, so why should they get youth wages?”

The Shop, Distributive and Allied Employees’ Association (SDA) is one of the unions representing retail and fast food workers. National Secretary Gerard Dwyer said 18 to 20-year-olds are adults “in the eyes of the law.”

“They can vote, drink alcohol and join the army — why are they paid as juniors?”

Business response

The Australian Chamber of Commerce and Industry (ACCI), the country’s largest business group, said scrapping junior pay rates is “unrealistic”.

ACCI policy chief David Alexander said: “No junior pay rates would make hiring young people far less attractive to businesses.”

“Taking on a worker with minimal experience requires extra risk and extra effort — they do not have the work or life experience that older adults have,” he added.

Response

Employment Minister Tony Burke can request Fair Work reviews of award rates. However, he didn’t indicate if he would call for a review of junior rates.

Instead, Burke pointed to recent Government efforts to create “secure jobs and better pay”, such as criminalising wage theft, in a statement to TDA.

Shadow Employment Minister Michaelia Cash urged unions and the Government to focus on “proposals which will increase productivity and lead to higher sustainable wage growth.”

What next?

The SDA and ACTU have lodged a formal application with the Fair Work Commission, calling for youth rates to be scrapped.

Fair Work will review the application and call on unions, workers, experts, and businesses to give evidence.

A decision isn’t expected until 2025.

Unions across other industries will need to make their own submissions to Fair Work.

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