Australian workers should get an extra week of paid annual leave to make up for the fact that employees are working longer hours than ever, a powerful union says.
Annual leave hasn’t increased in Australia since the mid-1970s under the Whitlam government, when unions successfully pushed for an increase from three weeks to four weeks.
When first introduced in 1941, annual leave was just one week, increasing to two in 1945, three in 1963 and four in 1974.
The Shop Distributive and Allied Employees Association (SDA) has now called for that to be increased to five weeks — however its resolution, which had been expected to be introduced at the Australian Council of Trade Unions (ACTU) Congress on Thursday, ultimately did not go forward.
The SDA recently won five weeks’ annual leave in bargaining with retailers including Ikea, Bunnings, Big W and Apple.
The union had been pushing for the resolution calling on the government to update the annual leave minimum in the National Employment Standards from 20 to 25 days and lift casual loading from 25 per cent to 27.5 per cent to reflect the extra leave.
SDA national secretary Gerard Dwyer told The Australian Financial Review on Thursday that five weeks made sense because employees were working longer hours than ever.
“Australian unions did an incredible job lifting paid annual leave in the 20th century,” he said.
“But for 50 years we have seen no change. At the same time, productivity has lifted, and technology has completely changed the way we work and live. There has to be a social benefit. And we say that five weeks’ annual leave is the obvious next step.”
The change would bring Australia closer into line with countries including the UK, France, Finland, Sweden and Norway. In some countries, employees who have been at a workplace more than a year are entitled to six weeks.
The triennial ACTU Congress, held over three days in Adelaide this week, sets the agenda for unions for the next three years and will likely inform Labor’s policies taken to the next federal election.
ACTU secretary Sally McManus on Wednesday celebrated a number of major IR reforms so far under Labor but called on unions to do more to reverse declining membership. Unions represent just 8 per cent of private sector workers.
“We have an environment that is more favourable than we have had for decades,” she said according to The Australian Financial Review.
A spokesman for the ACTU confirmed that there was “no resolution on five weeks’ annual leave” at the Congress.
The SDA has been contacted for comment.
Speaking on Seven’s Sunrise on Friday about the proposal, Herald Sun columnist Susie O’Brien said an increase would be welcomed by parents who struggle to spread their four weeks’ leave over 12 weeks of school holidays.
“So whether it’s five weeks for everyone but certainly a lot more parents in particular and people with caring responsibilities need more flexibility to take the leave when they can,” she said.
But Triple M host Luke Bona warned it would be hard, particularly for small businesses.
“The unions have to be a bit careful here,” he said.
“Businesses may be going, well we won’t hire as many people. Five weeks … it’s about lifestyle and life balance. If you’re a happier employee, I think you will be a better employee. So I think it should be looked at individually, I think that is pretty obvious. Why not have the extra week holiday if you’ve earnt it?”
Previous calls for Australia to increase annual leave to six weeks sparked warnings that it could place higher costs on employers and lead to job losses and higher prices for consumers.
“To grant an additional 10 days, two weeks of annual leave, that would be equivalent to an increase in the cost to employers of about 4.5 per cent,” independent economist Saul Eslakehe said in 2023.
“That might not sound like very much, and you might say that could be absorbed by profitable businesses, but not all businesses, especially small ones, are that profitable. I think the result would be some combination of job losses in smaller businesses and larger businesses seeking to recoup that 4.5 per cent increase in their wages by increasing prices.”
Pay rise call for 500,000 Aussies
Also on Thursday, the SDA and the ACTU launched a landmark application in the Fair Work Commission calling for the abolition of junior pay rates for more than half a million 18- to 20-year-olds working across the fast food, pharmacy and retail sectors.
The resolution on youth wages was passed unanimously by the Congress.
Under workplace rules, employees younger than 21 are not paid the full rate acro
ss the General Retail Industry Award, Fast Food Industry Award and Pharmacy Industry Award. Those aged 20 are paid 90 per cent of the award rate, 19-year-olds receive 80 per cent and 18-year-olds get 70 per cent.
The unions’ bid seeks to lift the pay rate of this cohort to be in line with the full award rate.
For workers under 18, the proposal argues 17-year-olds should receive 75 per cent of the award rate, up from 60 per cent, while workers 16 and under should receive half the award rate, up from 45 per cent.
Speaking from Adelaide, Ms McManus said young workers should receive the same pay rates when the cards were already “heavily stacked” against them.
“Young people don’t get discounts on their rent or youth grocery bills, so why should they get youth wages?” Ms McManus said.
Her comments were supported by Mr Dwyer, who argued young Australians faced wage discrimination because of their age.
“By the age of 18, most retail and fast food workers have many years experience in the sector, there is no justification for them being paid 30 per cent less,” he said.
The Australian Retailers Association (ARA) is expected to strongly oppose the application with the workplace umpire, saying it had been rushed through without any industry consultation.
“Junior rates are used to incentivise employment of young people who are less skilled, giving them an entry point for their careers,” ARA chief executive Paul Zahra said in a statement.
“Without these rates, these young people may otherwise struggle to compete against older, more experienced applicants.”
Mr Zahra added that “given the current economic conditions, we also have concerns about the impact this change would have on retailers who are experiencing a cost-of-doing-business crisis, especially so soon after the FWC’s decision to increase award wages by 3.75 per cent in addition to the upcoming 0.5 per cent increase in the Superannuation Guarantee Rate”.
“Many employers in the retail, fast food and pharmacy sectors are small businesses — mum and dad operators — who are severely challenged and simply can’t afford another wage hike,” he said.
— with NCA NewsWire