COMP NEWS – Australian retailers are warming to the idea of giving up to five weeks of paid leave to their employees, with IKEA and Bunnings being the first to offer the generous package.

Retail workers are leading a push for more paid leave, with an increasing number of employers offering five weeks of annual leave in what an industrial relations expert calls a “win-win-win” for workers, employers and the economy.

IKEA and Bunnings are among major retailers that have agreed to five weeks of annual leave, while the retail union says it is in negotiations with Coles, Woolworths and Kmart for more paid leave.

The union movement says more paid holiday leave will improve workers’ wellbeing and boost the economy, but employer groups warn it will impose extra costs on businesses.

Shop, Distributive and Allied Employees’ Association NSW secretary Bernie Smith said there had been no wages trade-off to achieve five weeks of annual leave in agreements negotiated with Bunnings and IKEA.

“Other employers like Big W, Apple and The Reject Shop have either included a fifth week of paid leave or are on a pathway to five weeks of annual leave,” he said.

Smith said retail workers deserved extra annual leave entitlements after years of productivity gains but low wages growth.

Proponents of extended paid leave argue that it will make retailers more competitive to talent and employees happier, harder workers. Opponents, however, worry that the costs of paid leave will be passed onto customers.

But Business NSW chief executive Daniel Hunter warned that widespread adoption of five weeks’ annual leave would raise inflation because higher staff costs would be passed onto consumers.

“While big corporates may have the flexibility to offer five weeks of annual leave, this prospect is challenging and potentially damaging to small and medium businesses,” he said.

“If widely adopted, it could add billions of dollars in cost to the books of already struggling businesses – limiting their growth and ability to borrow.”

IKEA’s 4000 Australian employees are entitled to five weeks of annual leave – or six if they regularly work overnight shifts – which the company’s co-worker experience manager, Greg Day, said had a positive impact.

Day said the introduction of five weeks’ annual leave would not affect customers or workflow.

“The main motivation for us is to be able to attract the very best co-workers to join IKEA, and for them to want to stay with IKEA and build their career with us,” he said.

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