Thousands of young retail workers will earn the full adult rate of pay after the wages umpire scrapped junior rates for some levels of employment.
The Fair Work Commission has decided junior employee rates will no longer apply to retail workers at level four and above.
Retail union nation secretary Gerard Dwyer said previous arrangements discriminated against adult and junior workers.
"Junior employees could be favoured over adults because of the lower rates," he said in a statement on Wednesday.
"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."
But the retailers' union is worried the judgement will cost young people a shot at landing a job by forcing them to compete with more experienced, adult workers.
The appearance of fairness masked the reality that junior applicants would be left to fight for the same positions as more seasoned employees, Australian Retailers Association chief executive Paul Zahra said.
"We are also concerned that the main effect of the decision will be to reduce the opportunities available for young Australians to find secure work, and make it more prohibitive for retailers to train young staff," he said.
"Junior rates provide a proven benefit for young Australians seeking employment early in their lives, providing an incentive for retailers looking to give opportunities to applicants which lack the training and experience of their established peers."
Mr Zahra said the decision demonstrated the commission was "out of touch" with the economic plight businesses in the sector are facing.
"We are in the first recession for almost three decades and it's disappointing to see the Fair Work Commission continue to elevate the costs of employing staff," he said.
Australian Associated Press