In a 281-page decision handed down on Tuesday, March 31st, the Fair Work Commission (FWC) has significantly curtailed junior rates for adult workers in the retail, fast food, and pharmacy industries. Junior rates are lower rates of wages paid to workers under 21, usually expressed as a percentage of the minimum wage. For example, 14 year olds in fast food can  be paid as little as 40% of the minimum wage.

The awards for these industries typically allow 18-20 year olds to be paid between 70-and-90% of the minimum wage. From 1 December 2026, that will change as 18-to-20 year olds will be entitled to be paid a full adult wage if they have been with their employer for at least 6 months. Junior rates for such workers will be phased out entirely by 2029. Workers under 18 will continue to be paid junior rates which the decision leaves unchanged.

Employers argued before the Commission that junior rates incentivise employers to hire young workers and reflect their relative lack of experience and maturity. Trade unions have long argued that junior rates are discriminatory against older workers and that, in any case, workers should be paid the same wage for the same work.

The application to vary the award (minimum conditions) for retail, fast food, and pharmacy workers was made by the Shop, Distributive and Allied Employees Association (SDA), the larger of Australia’s two retail workers’ unions, which has been advocating for the abolition of junior rates, at least for adults, for many years. 

The SDA’s national secretary, Gerard Dwyer, said in a statement: “18 year olds are adults. They struggle with the same cost of living pressures as every other adult. They do not receive a discount on their rent or the petrol they buy to get to work just because they happen to be 18. Now they will be paid the same as other adults.”

The Retail and Fast Food Workers’ Union (RAFFWU), the other union for retail workers, called for junior rates to be abolished entirely, not just those 18 or over, and criticises junior rates as breaching international human rights law.

The SDA’s application sought to abolish junior rates for those aged 18-to-21 and raise the junior rates for 14-to-16 year olds to 50% and 75% for 17 year olds. The FWC agreed with the first claim but did not take up the second. Accordingly, the decision has significant caveats.

Firstly, as mentioned above, the full abolition of junior rates does not take effect until 2029. Junior rates for 18-20 year olds will increase by about 5 percentage points every six months until they reach 100% of the minimum wage. The FWC says the phase-in will give employers time to adjust to what is likely to be a significant increase to their wages bill.

Secondly, at least until the rates are abolished according to the above timeline, young adults  will continue to be paid junior rates for the first six months of their employment. The FWC argued that this “window” at the start of a young adult’s employment would assist them in gaining experience.

This window applies even if the worker has had six months’ tenure at another employer in the same industry. This aspect of the decision could result in a lack of mobility for younger workers as they face a potentially significant (albeit temporary) pay cut if they move jobs. 

Third, the decision will not change junior rates for those under 18 which the FWC held to “benefit minors” by incentivising businesses to hire younger people. This is so despite the large jump in wage where a 17-year old who has worked for more than six months turns 18.

RAFFWU’s director of legal strategy Josh Cullinan, told Woroni in a statement that “There is no justification for maintaining any junior rates. The argument and view that young workers need to entice employers by being paid poverty wages is old and wrong”.

He continued, arguing that the decision would worsen age discrimination: “There is zero justification for paying a 13, 14, 15, 16 or 17 year old less. Bosses need them more than they need a boss. The same applies for 18 and 19 year old workers without 6 months with the same boss. A worker could have worked at the Coles checkout for 5 years by the time they are 19 but starting at Woolworths they would be paid a junior rate.”

Disclosure: Joseph Mann is a former member of the SDA, the applicant in the Fair Work proceedings.