PENALTY rates for casual retail workers will increase on Saturdays and weeknights - a pay boost just in time for the busy Christmas period.

The Fair Work Commission has ruled the Saturday penalty rate for casuals working in retail should be increased from 10 per cent to 25 per cent.

Casuals starting work after 6pm on weekdays will be brought into line with permanent retail employees, who get a 25 per cent loading on those shifts.

The Commission ruled: “In our view, the current casual rates for Monday to Friday evening work and Saturday work lack logic and merit.”

Shop, Distributive and Allied Employees Association national secretary Gerard Dwyer said the changes would benefit more than 350,000 workers covered by the award.

"These measures go some way to addressing the unjust treatment of casual workers under the award who are not properly compensated for the absence of sick pay, annual leave and the insecurity of work," Mr Dwyer said.

The new rates are set to come into place from November 1.

Retailers are fuming over the decision, which has been labelled ‘disastrous’ as they aired their concenrs about the upcoming Christmas trading period.

“Retailers usually thrive during the Christmas period,” Australian Retailers Association executive director Russell Zimmerman said.

“However, this year I'm concerned many retailers will bear the brunt of an unjust and detrimental decision.”

"Casual staff are the lifeblood of the retail industry and instead of seeing our retailers shine this Christmas, we will see them undertake more pressure and have to make serious decisions about their Christmas trade."

The penalty rate increase comes after the FWC cut retail casuals' Sunday rates in 2017, changes that will be phased in by July next year.