This opinion article by Business Council chief executive Jennifer Westacott AO was published in The Australian Financial Review on Thursday, 6 July 2023
Higher take home pay and the flexibility to work when Australians want could be at risk under the government’s proposed changes to casual work.
One in four Australians choose to be employed as casual workers, a number that hasn’t changed for almost two decades. It is the combination of flexibility and higher pay that makes it such an attractive option.
Casual workers receive a casual loading, generally 25 per cent extra an hour, in lieu of receiving things like leave entitlements. They choose this higher take home pay in their pockets immediately, combined with flexibility over their hours.
It’s the convenience of having a job that fits around their changing family commitments, study, outside interests and sometimes other work and is also an important entry point for young workers.
In fact, research commissioned by the Business Council shows that when it comes to considering a new job, people aged 18 to 34 value the flexibility of a role.
You would be lucky to find many Australians who didn’t start out their working life in a casual job.
It is critically important to provide job opportunities for millions of students, parents, carers, retirees and others who want to decide how and when they work.
It also helps businesses match their staffing to the demands of customers, which are no longer 9am to 5pm, five days a week. It supports many small and family-owned businesses, particularly in retail and hospitality, who need to do business when people want to shop.
The government wants to create a new test on how a casual worker is defined and it could mean people who have a regular pattern of work can no longer be a casual employee. It could mean a university student who fits work around their study to suit each semester, must always work these hours on a part-time arrangement, even though that student’s availability might change in the next semester.
Why would we create less opportunity for the millions of Australians who choose which shifts they can work and limit their flexibility to make ends meet?
The government’s intentions on casual work would engulf businesses, particularly small businesses, in red tape and paperwork, complicating how they provide the services and convenience people expect.
There seems a very real risk that it will force employers to check every worker, every shift, to see if there is a regular pattern of work and then offer, or even be required to replace casual roles with full or part time work.
This will require teams of people, as such subjective ‘tests’ cannot be automated. Large employers may have hundreds of thousands of staff to check.
Casual work is an important part of the nation’s ability to adapt to the changing nature of work. It is also key to delivering goods and services and ensures this country continues to be a safe and resilient place to invest as well as a competitive place to do business and create jobs.
Therefore, it is surprising that the government wants to put new roadblocks in the way of workplace flexibility and innovation with its plan.
Any move to re-define the notion of a casual employee would overturn the clear and reliable test that was adopted just two years ago.
Those changes to the law, which came around the time of a High Court decision, gave casual workers the right to choose to convert to full or part time roles. Since that new right was introduced, very few casual workers have actually opted to trade in their flexibility and higher hourly wages for ongoing employment.
The Department of Employment and Workplace Relations’ consultation paper on the government’s proposed reforms points out that under the changes in 2021, people who work regular, predictable hours are still classified as casual employees. They estimate that “one in three casual employees have regular and predictable working arrangements’’.
Presumably the government’s changes would reclassify these casual workers as permanent employees.
In effect, a student working for three hours every Saturday morning at their local supermarket or a retiree working at a hardware store every Thursday night could lose their casual loading which gives them higher take home pay.
It could mean lower hourly rates and a working roster that is set each week with less ability to change shifts.
With youth unemployment double the general jobless rate, it’s hard to understand why the government would narrow options for young Australians to start their working lives.
What Australia needs now more than ever is a workplace relations system that helps address the productivity challenge we face.
We need a vision that demonstrates how Australians can get ahead, not the roadblocks to flexibility and workplace innovation the government is proposing.