A tiny but powerful virus with a beer like name highlights economic vulnerabilities for precariat workers.

If you’re a casual or precarious worker right now, it’s not a stretch to say you’d be worried about the impacts that Corona Virus or COVID-19 might have on your ability to continue to bring in an income.  So what is a precarious worker?  Well, if you are employed in insecure, non-ongoing work, that’s you. 

Currently, there are 3.3 million of you.  You might be working casual shifts, short term contract, contracting or in the gig or on-demand economy.  You have very little access to paid forms of leave or entitlements and you might work irregular, intermittent hours and/or broken shifts without pay for those breaks in shifts.  You may not have access to superannuation or even be covered by workers’ compensation.

It’s worthy of a bit of an industrial history lesson on casual employment. Especially in the wake of ill-informed comments made by Christian Porter on how: “Many people would have already made provisions for that because of course the purpose of casual employment is that you’re paid extra in-lieu of the types of entitlements”.  Let’s just dissect that for a minute shall we?

Casual employment

The historical basis of being employed as a casual was that you were employed on an irregular and intermittent basis.  Filling emergency absences or peaks in workload.  Casuals were paid (originally) a 10% loading which increased many years later to 25%.  The loading was to compensate workers in lieu of sick and annual leave.  It did not compensate you for long service leave, because the intermittent and irregular nature of casual employment meant that you would never accrue it. 

The loading paid to casual employees does not account for other forms of paid leave or conditions available under Awards.  Largely this is because the concept of the loading was struck so many years ago, that the variety of paid leave and/or conditions now available to workers didn’t exist back in the day.  Now we have important conditions such as access to paid family violence leave, long service leave, paid training leave and other forms of paid leave.  Additionally, casuals do not qualify to receive redundancy pay or notice for termination (or pay in lieu).   

It is a false economy to think that the loading that is paid to a casual is fair compensation for the things they don’t get.  It doesn’t even touch the sides.  For Christian Porter to imply that a casual employee is able to put a bit away for a rainy day is extraordinarily naïve.

Ancient History

In the 1800s, most Victorians worked up to 14 hours a day, six days a week. There was no sick or annual leave.  Employers could sack employees at any time without giving a reason.[1]  But due to industrial campaigns, like the 8 hour day campaign, important workplace conditions and rights were won. 

During the late 1980s-2000s

Labor market de-regulation occurred during the early 1980s to 1990s reportedly due to international pressures.  In 1982, employees without paid leave entitlements accounted for 13% of the workforce.  Redundancies were basically unheard of until 1984 when the Technological Change and Redundancy Case (TCR Case) allowed employers to make entire workforces redundant on the basis of technological change.   Employers further realised that by employing non-permanent workforces avoiding the payment of redundancy entitlements was possible during the early 1990s.  At that time, casual employees did not have rights to unfair dismissal.  This was to come later.  But by 1992, casual employees accounted for 22% of all employees.  There were no laws regulating the use of casual employment or penalties for abusing this method of employment.  There still aren’t today.

Then in 1998, things were dialled up a notch when on 8 April, Patrick Stevedores dismissed all of its employees; liquidated its assets, became technically insolvent and imposed a lockout of workers.   Docks were fully operational by the next morning with new non-union staff in place.   

Known as the MUA dispute, this was a very high profile example of aggressive union busting techniques in the mining and maritime industries with added corporate phoenixing.  All of this was brought to you courtesy of John Howard, Peter Reith and the very hostile and anti-union Howard Government.  The genie escaped the bottle and it has never been put back in.

Photo:  2018: AMMA 100 years celebration – John Howard and Peter Reith being recognised as ‘giants of workplace relations’.

In 2000 the Australian Manufacturing Workers’ Union ran the casual’s test case to put a brake on precarious employment and employers avoiding their industrial obligations in the manufacturing sector.  They successfully applied for and won the right to insert into the Metal Industry Award 1998 a casual conversion clause which for the first time, gave workers who were employed as casual or on rolling contracts the right to seek conversion from casual to permanent after 6 months.

Then in 2015, I was pleased to have played a small part in the next round when during the 4 year modern award review, the AMWU argued to have ‘deeming’ rights for casual workers.  This meant that after 6 months’ employment, a casual worker would automatically become permanent, unless they opted out and remained casual.  The AMWU did not win that case.  However, what occurred was that casual conversion clauses were now seen as the new ‘floor’, which meant that other modern awards in other industries across Australia could now insert this provision giving basic protections against the abuse of casual employment.

But sadly by 2015, around 40% of the Australian workforce was now in some form of precarious employment.  This included casual, fixed term or short term contract work that was not ongoing in nature.  Australian has one of the highest rates of casual employment amongst OECD countries.

Between 1996 and 2016 employees without paid leave entitlements grew by 834,000 or 51 per cent while employees with paid leave entitlements grew by 2,381,000 or 46 per cent. [2]

What does the precariat look like?

In 2018, a Commonwealth Parliamentary Library publication summarising ABS data on casual employment tells us, the precariat[3]:

are young – Around 76% of employees aged 15 to 19 years and 41% of employees aged 20 to 24 years were casual employees in 2016—well above the all age average of 25%.

have caring responsibilities – casual employment among female employees had slightly fallen from 30% to 27% over this period. The male share of all casual employees had increased from 36 per cent in 1992 to 47 per cent in 2016.

are employed in hospitality – just under two-thirds of employees in the hospitality industry were casual employees. Other big users of casual employees were agriculture, forestry and fishing at 43%, arts and recreations services at 42%, retail trade at 36% and administrative and support services at 34%.

work in unskilled roles – food preparation assistants 79%, labourers 58% sales support workers 56%, sports and personal service workers and farm, forestry and garden workers 55%.

are low paid – mostly are paid under Awards and/or receive minimum wage.

I’ve blogged previously about our superannuation laws and the unfairness it contains for women.  But our super laws are also dudding young people of important early savings for their retirement.  Formulated at a time when super contributions were 3%, the $450 and over 18 years of age threshold means that super isn’t paid to young workers unless the threshold is met. 

These provisions rob young people of early retirement savings given that super contributions are at 9%.  Back when the legislation was developed the admin fees would have outstripped the contributions.  Not now.  And this needs to change.

This exclusion from early retirement savings will materialise for this group of workers in their later years as poverty in retirement. They struggle to save for a home and struggle to even enter the property rental market.

So how does all this relate to Corona Virus?

Corona Virus brings precarious employment as an issue into sharp focus.  A large swathe of the Australian workforce is left extremely vulnerable due to not having access to income when illness hits.  It is positively Dickensian when you consider workers in the 1800s also endured no sick or holiday pay.  Sadly, we seem to have come full circle. 

How will workers continue to place food on the table, cover medical costs and provide a roof over their heads with mounting debts caused by having take time off work unpaid?  Not to mention the impact that all this might have on our economy.

The hospitality sector gets a special mention at this juncture.  This sector has the highest rate of casual employment with around two-thirds of the entire workforce being employed casually.  Seventy-six percent of 15-19 year olds in that sector are casual.  If they don’t meet the super threshold – there’s no employer super contributions for them. 

And all of this from a sector that spearheaded the campaign to cut penalty rates.  Add to this wage theft.  High profile cases such as George Calombaris, Heston Blumenthal, Neil Perry and others show that wage theft comprises the main business model in hospitality.

Finally, the Fair Work Ombudsman got its act together after many, many years of complaints.  Investigations found the instances of wage theft in the sector to be rife.   A nationwide Fair Work Ombudsman audit of 1217 businesses in industries including hospitality, domestic construction, retail, manufacturing and administration services has recovered $1,326,125 for underpaid employees.  And now, even our national carrier Qantas is in the spotlight for underpaying workers.

Conclusion

Whilst Christian Porter wants to thank large corporations for coming to the fore and offering employees two weeks’ paid leave if they are sick with COVID-19, why is he not demanding these companies actually pay workers proper sick leave entitlements and stop abusing precarious employment?  And now with talk of welfare payments, why does the Morrison Government expect taxpayers to foot the bill to yet again bail out corporations that either engage in wage theft, avoid paying their fair share of tax or exploit workers all so their profits can soar?  Rent seeking at its worst and it is nothing other than a national disgrace.  

And now courtesy of a tiny yet highly infectious virus with a beer like name perhaps we all might sit up and take a bit more notice. Everyone should support the ACTU campaign to ensure all workers are provided with paid leave to protect them from the economic fall out from COVID-19. But employers should step up and cover the cost.

15 March 2020.


[1] In the 1840s employees who left their employment without permission were hunted down. An employee being absent for as little as one hour without permission could incur a punishment of prison or the treadmill.  These things happened under either the Bushrangers Act or the Master and Servant Act.
[2}https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1718/CasualEmployeesAustralia
[3]https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1718/CasualEmployeesAustralia

#IWD2020 Have we made progress?

A necessary blog for this eve of International Women’s Day 2020 after reading an excellent article in the Sydney Morning Herald by Eva Cox, titled: “Have women been fighting for the wrong thing all along?” I’m a big fan.  Whilst #IWD2020 will be a celebration of and by many women and women’s groups, there is an elephant in the room.  Have we made progress? 

There are many different aspects to equality, but this post will focus on women’s access to income and in particular – superannuation.   Women over the age of 50 are the fastest growing cohort of people experiencing homelessness.  They don’t have enough superannuation to see them into their retirement – let alone to live a comfortable one. 

Our superannuation system is outdated and structurally unfair.  In 1974, only 32% of the workforce had access to superannuation and most of them were men.  Fast forward to 1990 and super coverage had risen to 64%.  The industrial landscape was lacking in the diversity that it has today.   It didn’t take into account the need for women to work flexible hours or take maternity leave, or parental leave as it is now known.   And most people are aware that when parental leave is taken no superannuation contributions are paid – at all.  Neither does unpaid maternity leave or parental leave count for service.  It doesn’t break continuity of service, but it slowed down your progress towards gaining access to things like long service leave for example. I am, however, happy to say that the Andrews Labor Government’s 2018 Victorian Long Service Leave Act now provides for long service leave to accrue during parental leave.  As far as I am aware, Victoria is the only state in Australia to recognise this.

Some unions fought for and won paid maternity/parental leave schemes to be included in awards and agreements.  But again, no super was paid on it.  Years ago, I am  proud to say that I was part of the campaign to include paid maternity leave in the Local Government Award in NSW.  This campaign saw a paid maternity leave scheme be included in the Local Government State Award in 2001 for the first time that gave access to paid leave at either half or full pay.  This scheme was also available to casual workers who worked on a systematic basis and could be used with other forms of paid leave.  It was the first award outside of the public service in NSW to include such conditions.  But in hindsight, it still wasn’t enough. 

It has been a long time between drinks when you think about the introduction of our superannuation system in Australia to assist workers with retirement savings and the introduction of a government funded paid parental  leave scheme in 2011!  And yet employers are still not required to make superannuation contributions on paid parental leave.

Fundamental to working towards a resolution of this issue is that Federal Governments must recognise the value of care to our economy and place a value on care.  An Access Economics Study in 2010 estimated the value of care to be more than $40billion per year to the Australian economy – and that excluded caring for young children. 

Ten years ago the Henry Tax Review put forward a proposal, which was developed in a report by the Australian Human Rights Commission in 2014 titled Recognising and Valuing Unpaid Care.  The idea was that rather than taxing super contribution on deposit, that those contributions would be taxed at the marginal tax rate on income at the top end. Then, at the end of the financial year, a tax offset at a flat rate of 20%, would be received to encourage savings.  In other words, those at the top of the scale would pay 25% tax on their super contributions, freeing up revenue to fund super contributions for carers.

It was proposed that carers who are out of the workforce would receive an annual government payment into their super accounts of 9.5% rising to 12% of the minimum wage. If they entered the workforce the “carer credit” would fall to zero as their own super contributions increased to 9.5% (rising to 12%) of the minimum wage, so they would not be worse off if they return to work. 

Other countries around the world have introduced this scheme or a similar scheme known as universal credits.  The UK introduced Carer Credits in 2010.

And yet, here we are in 2020, and this idea has progressed no further. If only I could see 15,000 emails in my inbox from people on this issue.  I have to say I’m dismayed that I haven’t.  Yet on duck shooting, that is exactly what I have received.

How much longer do women have to wait until they can have income equality and not have to worry about what retirement might look like for them?

So on this International Women’s Day 2020, it’s a call to arms for the continued agitation for equality for women.  It’s necessary.  It’s important.  And equality makes things better for everyone.  By reducing gendered barriers, we can ensure a much more equal society.  We can reduce violence against women and work towards the removal of gendered barriers and stereotypes – for everyone.

7 March 2020.