The Fair Work Commission has refused to approve Swedish fashion retailer H&M;'s first new national agreement covering 1200 employees after finding its trade-off of weekend penalty rates left casuals worse off than the industry minimum.

Deputy president Geoff Bull raised concerns the retail giant, which has been battling to have its two-year agreement approved since March, may also have misled the commission on the pay rates of full-time employees after discovering their salaries would have been up to $5000 less than initially stated.

H&M; proposed to trade off Saturday and weeknight penalty rates and lower Sunday rates for higher weekly base pay ahead of its retail expansion into Australia in 2016.

However, the Shop Distributive and Allied Employees Association (SDA) objected that the agreement included sub-award overtime provisions and argued two out of 50 casuals would be worse off based on an analysis of rosters.

Josh Cullinan, an industrial officer who helped to axe the Coles agreement, also argued any non-casual working more than 60 per cent of their hours on weeknights or Saturday would be worse off.

H&M; offered a series of undertakings over several months to satisfy the commission's 'better off overall test', including by capping weekend hours for casuals at 65 per cent over a 13-week period.

But Mr Bull found workers on certain roster arrangements could still be up to $2.42 a week worse off.

"I consider that the undertakings result in financial detriment to casual employees covered by the agreement and as such the agreement cannot be approved," he said.

"Having regard to the exhaustive attempts to obtain satisfactory undertakings to date I am not prepared to allow the approval process to be extended any longer."

The deputy president took aim at H&M;'s repeated statements to the commission on the salary rates of full-time employees, which were not specified in the agreement but were submitted by H&M; in May, confirmed by its national human resources manager in June and repeated in September and October.

But in its final December undertaking, with no specific mention, H&M; included lower proposed salary rates for classifications, including rates $5000 a year less for a store assistant manager.

It was only after Mr Bull's associate contacted H&M;'s HR manager that the company confirmed the reduced rates were not due to clerical error, but budget reviews and new stores opening since the agreement. The manager claimed the cuts would not affect those in existing stores.

Mr Bull said "there are a number of difficulties with this explanation", noting H&M; had failed to advise him of any change, its latest undertaking made no such exemption, and the retailer had submitted there was "no doubt" salaried employees voted on the deal with a "full understanding" of its proposed terms.

SDA national secretary Gerard Dwyer said the SDA would now look to negotiate a new deal that "contains fair pay and working conditions".

H&M;, whose workers in Sydney, Melbourne, Brisbane and Perth are on the retail award, did not respond to requests for comment.