Despite the squarking to the contrary by the Federal Government and business groups, the sky will not fall if the working conditions of casual workers are improved argues Shadow Minister for Workplace Relations, Craig Emerson.

“A casuals conversion clause in the metal industries award might not do much harm Craig, but heaven help us if it ever got into the hospitality industry”.

So warned the chief executive of one of Australia’s biggest industry associations.

The CEO was responding to my assertion that Labor’s casuals policy was moderate and its adoption in the metals award hadn’t had any noticeable adverse impact on Australia’s metalworking industries.

The CEO was arguing that very few casuals in these industries had availed themselves of the opportunity to request a conversion to permanent work.

It is beyond me how this argument sits with the claim – made simultaneously – that the insertion of such clauses in awards would bring the sky crashing in.

“If no-one’s taking it up, what’s to fear”, I asked the CEO.

That’s when I got the prophecy that the sky would indeed fall in if a conversion clause for casuals were ever inserted into awards covering the hospitality industry.

Unfortunately, I did not know at the time that the seeds for the sky’s destruction had already been sown – on 22 July 2003 a variation in the federal Motels, Accommodation and Resorts Award gave casuals employed in the same workplace for more than 12 months a right to request a conversion to permanent work.

That was more than a year ago and every day I check, but every day the sky seems to be in pretty much the same position relative to the earth.

But I’m afraid to report that on this matter there may be a big split between the ACTU and me as Shadow Industrial Relations Minister. I told the Queensland Industrial Relations Society that it was Chicken Little who warned that the sky was falling in, while Greg Combet wrote in a letter to The Australian Financial Review that it was Henny Penny.

So for today’s speech I checked on the internet. I’m relieved to report that it’s not a split – we were both right.

The story is as follows.

Narrator: Chicken Little was in the woods one day when an acorn fell on her head. It scared her so much she trembled all over. She shook so hard, half her feathers fell out.

Chicken Little: “Help! Help! The sky is falling! I have to go tell the king!”

Narrator: So she ran in great fright to tell the king. Along the way she met Henny Penny.

Henny Penny: “Where are you going, Chicken Little?”

Chicken Little: “Oh, help! The sky is falling!”

Henny Penny: “How do you know?”

Chicken Little: “I saw it with my own eyes, and heard it with my own ears, and part of it fell on my head!”

Henny Penny: “This is terrible, just terrible! We’d better hurry up.”

To cut a long story short, they kept running to tell the king and on their way they met up with Ducky Lucky, Goosey Loosey, Turkey Lurkey and unfortunately for them, Foxy Loxy.

Instead of leading them to the king, Foxy Loxy lured them all into his den and they never again saw the light of day – a fate, I suppose, akin to the sky falling in.

The moral of the story? Don’t panic if an acorn falls on your head – it might only be a conversion clause for casual workers.

Of course, there’s lots of birds of a feather in the Government warning that Labor’s industrial relations policies will bring the sky crashing down.

There’s Chicken Little Johnny Howard who squawked to The Australian on 19 January this year:

“You’ve got to pay the casuals all these leave entitlements as well as the loading.”

Then Henny Penny Kevin Andrews shrilly warned Australia’s top 50 CEOs[1] that Labor’s policy was:

“effectively forcing casuals into a permanent position …”

And Big Bird Joe Hockey screeched in a media release on 5 February 2004:

“Firstly, the Labor Party intends to force employers to provide additional benefits to casual employees, such as holiday and sick leave. This ignores the fact that many casual employees already receive loading to compensate for these benefits. The ALP intends forcing its solution on the workplace, where many employees have chosen casual employment for the flexibility it offers.”

It’s probably best that I don’t put Coalition names to Ducky Lucky, Goosey Loosey and Turkey Lurkey – but there’s plenty to choose from!

But I do have some bad news for close friends of Chicken Little and Henny Penny. Not only has Labor’s casuals policy been adopted in the metals and hospitality awards, our policy or some variation of it has spread to 29 other federal awards and 37 state awards.

Now that’s a lot of acorns! And still the sky remains intact and roughly the same distance from the earth.

True to form, the Howard Government wants to disallow such conversion provisions for casual employees from being included in awards. It has a bill in the parliament called the Award Simplification Bill that would remove from awards all provisions that give employees any ability to transfer from one type of employment to another.

This bill alone speaks volumes for the Howard Government’s determination to continue taking vulnerable Australians down the low road to low skills and low wages.

Casual employment is the Government’s favoured form of employment, since it keeps employees in a totally vulnerable position – allowing employers to dismiss them easily and providing maximum flexibility and choice for employers.

It is no coincidence that the same bill would remove from awards any obligation on employers to invest in the skills of their employees.

It is one of the most disgraceful pieces of legislation in the parliament – which is a big statement when it comes to the Howard Government.

Recent surveys conducted by the Australian Industry Group and Australian Business Limited have identified skills shortages as a high priority for business.

And yet the Howard Government wants to remove from awards any obligation on businesses to invest in the skills of their employees.

It’s not as if the Government intends to pick up the slack from businesses reducing their investment in skills formation. In its $52 billion pre-election Budget spending splurge the Government has allocated not one extra cent to vocational education and training.

Is it any wonder that the Productivity Commission has concluded that in recent times Australia’s slowing rate of skills formation has probably detracted from Australian productivity growth.

If the business community is fair dinkum about maintaining productivity growth it should support measures that increase investment in skills formation, not reduce it.

Encouraging the casualisation of the Australian workforce is no way to support investment in skills formation. Businesses have little incentive to invest in the skills of causal staff when they know casuals may leave in search of permanent work.

This is borne out by empirical research.

Casual employees are less likely to have received training in the past 12 months than permanent employees (50 per cent likelihood for casuals compared with 71 per cent for permanent employees). Long-term casuals are even less likely to receive training (only 45 per cent of casuals who have been with their employer for more than one year are likely to have received training in the past 12 months).[2]

Already one in four working Australians is a casual and this is projected to rise to one in three by the end of the decade.[3]

Casual full-time work has grown by 42 per cent under the Howard Government, compared with growth in permanent full-time work of just seven per cent.

Casual workers on average earn less than permanent employees, even with the casual loading. Median hourly earnings for casuals are $15, compared with $19 for permanent employees.[4]

Around 60 per cent of casuals have been in the same workplace for more than a year.

Job insecurity has been identified as a significant health risk for workers aged over 40 years. Insecure employment more than doubles the risk of physical health problems and more than triples the rate of anxiety and depression.[5]

Yet the Government has repeatedly claimed that casual employment is just the way working people like it. They cite surveys to support their claims.

Well, I’d be interested in the Government’s interpretation of a random survey of 1000 people recently undertaken by Irving Saulwick & Associates.[6] It found that more than half (56 per cent) of casuals preferred permanent work. And the main reason they wanted permanent work was job security and financial security.

Job security and financial security are important in gaining access to bank loans.

When casuals apply for a mortgage they are commonly consigned to what are called ‘low-doc’ loans. These are loans to applicants who don’t have a well-documented work history or contract for future work.

Banks issuing low-doc loans might apply a slightly higher interest rate. But usually they apply strict limits on the amount they are willing to lend.

The effect is to restrict casuals to low-cost housing, with often long journeys to and from work – or to shut casuals out of home ownership altogether.

It is not surprising that under the Howard Government’s policies, first home ownership has fallen to record levels.

Labor recognises that in many circumstances casual employment may suit both the employer and employee. We recognise, too, that casual employment plays a valuable role in providing job opportunities and a ready workforce in peak seasonal times, such as in agriculture, tourism, hospitality and retailing.

But the employment of casuals on a long-term regular basis is being used to strip away basic working conditions, in travelling the Howard Government’s low road to low skills and low wages. Casuals are being used by businesses to under-cut rivals who provide reasonable pay, working conditions, skills and a career path for their employees.

Avoiding investment in skills in a casual workforce might be short-term cost minimisation but it is short sighted and a long-term cost to Australia.

Labor will amend the objects of the Workplace Relations Act to ensure that the Australian Industrial Relations Commission takes into account job security and the need to prevent the misuse of casual employment for long-term regular casuals.

The recent variations to awards that I have already mentioned give to casuals who are employed on a regular basis a greater choice to become permanent – if they want.

These variations allow casuals employed regularly for a set period of time – which can vary according to the industry – to ask to convert to permanent employment. Employers are not able to refuse unreasonably. In determining reasonableness, the Commission considers issues like the size and nature of the business.

Under Labor, provisions relating to the size of the business will adequately protect the interests of small business.

If casuals do convert, they gain entitlements enjoyed by permanent workers – and forego their casual loading, since they are no longer casuals. Casuals who wish to remain casuals will be free to do so; the scheme is not compulsory for them. These award provisions do not apply to casuals employed on a short-term, seasonal or irregular basis.

Labor will encourage this process, without enacting prescriptive, one-size-fits-all legislation.

Despite their inclusion in dozens of awards, these casual conversion clauses, I am told by some business groups, will result in businesses spending all their time in the Commission defending decisions not to offer permanent work to casuals.

Yet we are unaware of any cases being taken to the Industrial Relations Commission. It seems to be working as Labor would want it – these matters are being settled by the parties in Australia’s workplaces.

This is a process Labor will encourage – whereas the Howard Government wants to prohibit its inclusion in awards altogether.

When John Howard speaks of choice he means a choice for employers but not employees.

When Labor speaks of choice we mean a choice for both employers and employees.

When John Howard speaks of flexibility he means downward flexibility for vulnerable working Australians.

When Labor speaks of flexibility we mean flexibility with fairness.

When Labor speaks of prosperity we mean prosperity with a purpose.

That purpose is to achieve a truly fair and decent society out of the bounty of a productive, open, competitive economy.

That means a better deal for long-term, regular casuals.

And for all the squawking of the Chicken Littles, the Henny Pennys and their fine feathered friends, the sky will not fall in.

More Information

Fact Sheet on Casual Work

Only A Casual: How Casual Work Affects Employees, Households and Communities in Australia – this study reports on the experience of 55 casual workers and their attitudes towards casual work, be it positive, ambivalent or reluctant. Download the Executive Summary (PDF) or the Full Report (PDF).

Casual Work and Casualisation – How Does Australia Compare? – a report by Prof Iain Campbell, Centre for Applied Research which explores international comparisons, centring on the pivotal issue of the peculiarity of casualisation in Australia.

Paradoxes of Significance – Australian Casualistion and Labour Productivity – a report by Dr John Buchanan, Deputy Director of Research, acirrt, University of Sydney, looks at the economic significance of casualisation.