Some Australian retailers will be hard hit with Fair Work Australia’s decisions to increase modern award minimum wages by 3.4 per cent.

This will bring the new national minimum wage to $589.30 per week or $15.51 per hour and will take effect from the first pay period commencing on or after 1 July 2011.

However, both the National Retail Association (NRA) and the Australian National Retailers Association (ANRA) have slammed the Fair Work Australia for the minimum wage change will coincide with the second phase of the award modernisation process that will be applicable from the same date. 

NRA executive director Gary Black has described the decision as a double whammy as it will mean more than an 8 per cent increase for some retailers.

“For most retailers the modernisation increase will be around two per cent, but for some fast food providers it will be as high as five percent, making the total increase for many retail and fast food employers between five per cent and eight per cent,” he said.

Similarly, ANRA CEO Margy Osmond said Fair Work Australia failed to take into consideration the additional lift in wages many retail sector employees will gain.

“A significant increase like this is a further impost on the sector when it is still struggling to gain momentum and the threat of an interest rates rise remains strong,” she said.
“The sector cannot afford to continue to absorb these costs without some fall out.”

According to Black, in order for retailers to cope with the cost it may mean retailers will need to cut staff numbers down and reduce hours for casuals.

“It’s no secret that retail trade has been in the doldrums for 12 months, with aggressive cost-cutting going on across the sector in order to keep customers coming through the doors,” he said.