The National Retail Association has expressed its dismay at the Fair Work Commission's decision to scrap junior rates for retail workers at level 4 and above.
The decision means that from 1 February 2021 thousands of young retail workers will earn a full adult rate of pay.
Speaking on the decision, NRA deputy CEO Lindsay Carroll said that the organisation is baffled by the Fair Work Commission's decision.
"While this might seem like a win for workers on the face of it, it will mean that teenage candidates will now be competing with experienced adults in the retail space for the same job.
"Junior pay rates have always been a recognition that young workers starting out in the industry need more support on the job and are not as productive as more experienced workers.
"They are also intended to incentivise employers to give teenagers a ‘leg up’ in their career paths, opening up opportunities and helping them learn skills that they take with them throughout their careers.
"This decision to drive up the cost of hiring teenage workers will inevitably lead to a shift away from hiring younger people, as the financial proposition simply doesn’t add up for business owners anymore.
"At a time when the Federal Government is stepping on the economic accelerator as hard as it can to get young people into jobs, it is baffling that the Fair Work Commission is pulling on the handbrake," she said.
However, SDA union national secretary Gerard Dwyer said that the decision is a 'win' for young workers.
"The Fair Work Commission handed down a decision on an application from the SDA, deciding that junior rates will no longer apply to workers at level 4 and above subject to the General Retail Award.
"This is a big win for the SDA and more importantly for young workers in the retail sector.
"This means that thousands of young workers will now earn the full adult rate of pay," he said.
Dwyer added that previously the junior rates could be applied unfairly, discriminating against workers.
"The previous arrangements discriminated against both adult and junior workers.
"Junior employees could be favoured over adults because of the lower rates.
"On the other hand, it discriminated against junior workers because they were doing the work of an adult and getting a lower rate of pay.
"This is another important step in securing fair pay for “so called” junior employees and builds on the success the SDA has had in getting the adult rate paid at 20 years of age as opposed to 21.
"Young workers are an important part of the Australian workforce and the SDA will continue to fight for their rights and fair treatment at work," he said.
However, the NRA argues that this decision is similar to the one made in the trade sector.
"We saw a parallel some years ago when wages for junior apprentices in the trade sector were increased, and the number of young people being offered jobs in that space has plunged ever since," Carroll said.
"There can be little doubt that this decision will have the same impact on teenagers in retail, and other areas if it is allowed to stand unchallenged," she said.