The reality behind the unions' claims of insecure work

Well before COVID-19, the union movement was complaining about the increase in “insecure work” in Australia. According to ACTU secretary Sally McManus, it is a key problem to be addressed in any industrial relations reform.

But there’s one catch in this popular argument. Despite common perceptions of the rise of the “gig economy” and the corresponding loss of permanent jobs, the percentage of casual workers in Australia has actually been the same for more than two decades.

Including independent contractors – whether new-style gig workers or traditional tradies – casuals constitute about 20 per cent of the workforce. Of all employees, it’s about 25 per cent. Just as it has been for all of the 21st century.

Clearly, the number of casuals has grown over two decades, but only in line with other categories of employment.

It’s true the coronavirus has a disproportionate effect on casual workers given the heavy skew to such employment in areas of the economy particularly badly hit, such as retail, tourism and hospitality.

That financial impact has been even worse because more than 1 million casuals working for less than 12 months with the same employer were not eligible for JobKeeper payments. The ACTU, along with Labor, strongly disagree with their exclusion.

But Industrial Relations Minister Christian Porter says the most insecure work at the moment is for hundreds of thousands Australians wondering whether there will actually be a job at the end of the COVID-19 crisis.

And despite the Coalition’s new tone of co-operation with unions, Porter concedes there will be differences of opinion in the working groups, including the one looking at casual work as part of the government’s reform plans.

Those differences will no doubt extend to the government’s determination to cut off JobKeeper payments in September and end the effective doubling of unemployment benefits under the JobSeeker program.

It is still difficult to establish exactly what problems the union leadership wants to address in terms of “insecure work” beyond the impact of COVID-19.

There has certainly been an increase in “fixed-term” contracts, even if rolled over every year, that are now common in the education sector.

Although this issue attracts less public attention, the impact on job retention is likely to be devastating given the financial woes of universities, for example. So fixed-term employment will form part of negotiations by the same working group looking at casuals.

Court clarification

Yet constant references to difficulties facing casuals suggest the greater focus of the union movement is on reducing numbers employed on that basis.

This might not fit neatly with the notion of flexible workplaces quickly responsing to changing demand. But it also doesn’t seem to fit the preferences of most casual workers.

Most awards now make it possible, for example, for casual employees to request permanency after working for either six or 12 months. Porter has already suggested this should be a universal right for all casual employees to make such a request and is obviously prepared to legislate.

Employers must have reasonable grounds to refuse a request and there may be some further negotiation about what is considered reasonable or even whether an employer can actually refuse.

But so far, only a small percentage of people employed on a casual basis make a request to be made permanent despite the ability to do so.

Most don’t want to give up the pay loadings of 20-25 per cent designed to make up for the lack of other benefits such as annual leave and sick leave.

Some also prefer the flexibility of casual employment despite the difficulties it creates with obtaining mortgages or credit, for example.

What actually makes it necessary for employers to establish a clearer definition of casual work is a Federal Court judgment last week.

Until now the Fair Work Act has not included a definition of casual work, relying instead on established practice that meant those engaged and paid on a casual basis were regarded as casuals.

But on appeal from labour hire company WorkPac, the full Federal Court upheld an original judgment that regular, predictable shifts on a set roster mean an employee must be considered permanent, not casual.

That case and another earlier one were funded by the CFMEU, keen to fight the use of labour hire in the coalmining industry.

A regular danger zone

These labour hire companies do pay any casuals a loading but their rates, while well above any relevant award, are usually below even higher pay agreements negotiated by the union for direct mine employees.

The Federal Court judgment will extend across the entire economy, however – with particular impact on those same badly suffering sectors of tourism, retail and hospitality. Many of these casual employees also prefer to keep regular, predictable shifts. Yet regular rosters will now be a danger zone for any businesses employing them.

Porter points out the government’s alarm is about any “double dipping” on both permanent entitlements such as sick leave and annual leave, as well as casual pay loading.

It is not, he insists, an argument about the right to either benefit – but the right to both. Government regulations attempting to prevent this double dipping were effectively overturned by the Federal Court judgment.

This is compounded because the judgment will allow casual employees to claim for years of backdated permanent entitlements. This would not only financially cripple thousands of businesses struggling to survive.

It would also make all of them more reluctant to rehire casuals to avoid risking extra costs as the economy reopens and JobKeeper ends in September.

The result is considerably more complicated than the traditional union battle cry against “insecure work”. The working group will have its work cut out for it.