The steady growth in the level of and nature of casual employment in Australia poses unique challenges for the union movement.
With a quarter of Australian workers and a third of women in the workforce now employed as casuals, a fresh look at the union movement’s traditional response to casual employment is required. The ACTU has recognised the changes in the labour force and the need to adopt a strategy which protects the interests of casual employees, whilst maintaining and enhancing the interests of ongoing part-time and full-time employees. This article outlines one element of the ACTU strategy, the campaign for parental leave for long-term casuals.
Growth in Casual Employment
The nature of casual employment has significantly changed in the last two decades. Casual employment in Australia has more than doubled as a percentage of paid employment since 1982, having risen from 13.0 per cent of the workforce to 26.4 per cent in 1999 (Campbell 2000). More than 11 per cent of the full-time workforce in 1999 were employed on a casual basis, a 246.6 per cent increase from the 1982 estimate of 4.5 per cent.1
Casual employment practices have made inroads into industries and occupations where there had previously been minimal use of this form of labour. In a number of industries, employers have converted full-time and part-time positions to casual positions, and when creating new positions have generally offered them on a part-time or casual basis. Between 1990 and 1999, 71.4 per cent of total employment growth was casual (Wooden 1998). In some industries, casual employment has become the norm rather than the exception.
As a result of these changes, the gender, age and occupation of a casual employee are more widespread than ever before. As the nature and extent of casual employment has dramatically changed in Australia, the need to identify adequately casual employment has increased.
The average length of employment on a casual basis has considerably expanded, such that casual employment is increasingly associated with an ongoing expectation that work will be provided and accepted. The concept of ongoing or ‘permanent’ casual employment, whilst perhaps a contradiction in terms, exists in practice in significant areas of the economy.
These changes have added to the definitional uncertainty of what constitutes a casual employee. Awards will often define a casual employee as an employee who is employed and paid as such and are of little assistance in defining the true nature of the employment relationship. It is increasingly difficult to differentiate between those persons with an expectation of ongoing employment, often referred to as permanent employees, and those that do not have an expectation of ongoing employment, true casual employees.
Often the true nature of an ongoing or continuing contract of employment is cloaked behind the term casual, when the employment relationship is in no respect casual in nature. ABS calculations of the level of casual employment have been criticised by the Commonwealth and others, in that owner managers are included in the figures and thus inflate the level of casual employment in Australia. The Commonwealth claims that the exclusion of owner managers of limited liability companies reduces the level of casual employment as a percentage of total employment in Australia in 1999 from 26.4 per cent to 25.0 per cent (Commonwealth Government 2000).
While many interested parties are debating the nature and level of casual employment in Australia, all parties concur that casual employment in Australia has steadily risen and continues to do so. There are several factors which explain this change.
Reasons for Growth in Casual Employment in Australia
Many people are not in a position to choose the form of their employment contract. In 1986, 40 per cent of casual employees would have preferred to be permanently employed (ABS 1998). An ACTU survey recently found that 59 per cent of casuals would prefer permanent employment (ACTU 1999).
Others may enter the workforce on a casual or part-time basis because their commitments prevent them from working on a full-time basis. Many casuals, particularly full-time students and younger workers, prefer part-time employment. Higher school retention rates and higher levels of participation in tertiary education over the past two decades have increased the labour force available to undertake part-time or casual employment.
Increased workforce participation rates of women and in particular, women with children, have also contributed to the supply of labour willing to work part-time hours. The female participation rate has increased from 44.6 per cent in April 1980 to 54.7 per cent in December 2000 (ABS 2000).
Another source of potential casual employees is found in the expanding pool of older, predominantly male employees who have been unable to obtain alternative employment following retrenchment as a result of downsizing, closure or outsourcing.
Demand for ‘just in time’ labour
The growth in casual employment in Australia is primarily demand driven. Of the 1.15 million jobs created in Australia in the decade to 1998, more than two in three were offered on a casual basis. The vast bulk of them were also part-time. The growth in casual employment appears impervious to cyclical fluctuations in the economy. The level of casual employment in Australia has continued to rise as a percentage of overall employment through periods of economic growth and decline.
The use of casual employees allow employers to maximise flexibility through the use of ‘just in time’ labour. Changes in technology and management techniques have enabled some employers to match variable demand with casual employment. Allan’s (1998) study of the employment behaviour of private hospitals found that employers are extending the use of precarious forms of employment into all occupational categories whilst simultaneously attempting to build long-term relationships with casual employees.
Part-time work, whether casual or ongoing, allows for improvements in the efficiency of labour utilisation. The elaborate fine-tuning of rosters and staffing levels and the mix of full-time, part-time and casual staff over an increased spread of ordinary hours ensures that overtime is used only in cases of unexpected events or emergencies.
In most cases there is a clear financial incentive to reduce the use of overtime offered to full- or part-time employees and to replace it with casual labour. The standard casual loading is 20 per cent, less than half the standard overtime loading of 50 per cent. Employer choices regarding the appropriate mix of labour may, in many cases, not be informed decisions or may be based on potential rather than actual savings. These can easily be eroded through absenteeism and the consequences of poor morale, if the desired flexibility by the employer does not correlate with the regularity of work desired by the employee. This may especially be so during periods of high demand for labour. The Evatt Foundation’s study of women’s experience of casual employment (Smith and Ewer 1999) concluded:
The evidence from this project suggests that the higher rates of casual employment in workplaces/industries in the private sector and/or the lower rates of unionisation reflect the greater ease with which the existing regulatory framework is breached, rather than a rational consideration of the costs and productivity of labour. On the evidence available here, employer decisions to engage labour on a casual basis rest partly on a miscalculation of the costs of casual employment , an inappropriate assessment of their employment needs and the (incorrect) assumption that on-going casual employees could be terminated with greater ease.
Deregulation of the labour market and a reduction in union density have encouraged a rise in casual employment. It is also the case that the utilisation
of casual employment has increased as some employers have attempted to bypass industrial regulation.
The Ministerial Information Paper (Reith, 2000), Casual employment and working hours in Australia, suggests that the introduction of the Workplace Relations Act 1996 has introduced greater flexibility which, in turn, has resulted in a fall in the proportion of part-time employees who are employed on a casual basis.
It was no coincidence that the growth in casual employment in Australia was most pronounced throughout the 1980s and early 1990s when the workplace relations system did not have the flexibility to embrace new forms of regular part-time employment ….. Through the Act, workers now have greater access to regular part-time work. In the past, whilst many employees, women in particular, wanted regular part-time work, award restrictions which limited the number of people able to work on this basis meant that they were forced to become casual part-timers in order to work less than full-time hours.
Campbell (1996) argues that there are three groups of casual employees. The first group are not covered by labour regulation and are unprotected other than by common law. The second group comprises those who, despite being covered by awards, are vulnerable to non-adherence to minimum award conditions. Campbell’s third group consists of those casual employees who are protected or regulated by award or statutory minimum conditions. He does not equate regulation in this case with protection:
On the contrary, award regulation generally amounts to little more than the ratification of exemptions, by means of which casual employees are specifically excluded from benefits and forms of protection (A similar approach permeates statutory regulation).
….The discussion points to the existence of a group of casuals who can indeed be seen as effectively regulated and who enjoy the prescribed casual loading. But regulation does not in this case signal protection; it merely ratifies the absence of protection. It establishes what can be described as a ‘regulated precariousness’.
The Full Bench in their decision in the application by the MTFU to vary the
Metal, Engineering and Associated Industries Award 1998 – Part 1, supported the contention that demand for casual employment is linked to a reduction in workers’ rights.2
The ACTU considers that while discussions on the cause and actual level of casual employment are important and interesting, they do not alter the fact that there has been a substantial growth in casual employment and that its character had changed. Consequently there should be a revision of appropriate entitlements provided to and protection available to casual employees. Parental leave is one such entitlement.
Parental Leave Test Case for Long-term Casuals
As part of the response to changes in the nature of the workforce, the ACTU resolved to extend parental leave to casual employees employed for longer than a year as part of a wider strategy to improve benefits and security of casual employees and to expand existing maternity/parental leave provisions.
Parental leave has been recognised as an important entitlement for workers since the Maternity Leave Test Case decision of 1979. Maternity leave was subsequently extended to cover adoption and to apply to fathers.
The Commission, in the Maternity Leave decision of 1979, adopted the view that the concept of continuity of employment in industry should not be incompatible with motherhood. The Commission expressed the view that:
The claim, if granted would recognise the special industrial interests of those female employees who elect to combine motherhood with continued participation in the work force. The preservation of job security in the event of maternity might well facilitate career opportunities and encourage career aspirations amongst women who have hitherto regarded termination of employment as an inevitable consequence of motherhood. (3)
The provision of parental leave is now considered a basic community standard, but one which does not apply to casual employees. Too many workers are missing out on parental leave and its associated security of employment.
The Human Rights and Equal Opportunity Commission’s (HREOC), Pregnant and Productive report recommended to the Federal Government that the Workplace Relations Act 1996 (Cth) be amended to provide parental leave to long term casual employees after 12 months service. This recommendation was rejected by the Howard Government.
In November 2000 the ACTU lodged a claim with the Australian Industrial
Relations Commission to extend the existing Parental Leave test case provisions so that they apply to long-term casual employees.
The ACTU’s decision to run a case before the Industrial Relations Commission was to expand the existing community standard to casual employees, recognising that casuals are less likely to be in a position to negotiate appropriate workplace arrangements and primarily rely on the award as a minimum safety net to provide basic community standards.
Interveners in support
For some time, the ACTU had been in contact with various organisations, both semi-government and community, to attract support for its claim. Consistent with the recommendations contained in its Pregnant and Productive report, HREOC indicated it would intervene in support of the ACTU’s application. Other interveners in support included Job Watch, the Australian Catholic Commission for Employment Relations and the State Governments of Victoria and Queensland. Whilst the Government of New South Wales indicated support for the application, no formal intervention was made.
During the course of the case the Queensland and New South Wales governments announced changes to their legislation providing parental leave to casuals. These changes reflected the ACTU’s claim before the Industrial Relations Commission. The Victorian Government sought to enact a similar measure in the Fair Employment Bill, but this was rejected by Victoria’s upper house.
The initial response from representative employer organisations towards the ACTU’s claim ranged from cautious and qualified support to total opposition. The ACTU adopted a strategy of public campaigning in support of the claim and private negotiations with those opposing it.
The ACTU was working on the premise that it would be extremely difficult for an employer to argue that a casual employee should lose her job because she was having a child, particularly if the leave sought was to be unpaid.
The ACTU indicated at an early stage that it was prepared to negotiate to deal with any reasonable or legitimate employer concerns, but was not prepared to change the key aspect of the claim, i.e. the provision of parental leave to casual employees with 12 months or more service with the one employer.
Initial discussions with the Australian Chamber of Commerce and Industry (ACCI) proved constructive. The Chamber raised concerns on behalf of its members and sought amendments to the claim, but it became apparent that some form of agreement was likely with the Chamber.
With 55 per cent of its work force in its industry employed as casuals, the Australian Hotels Association (AHA) took a different approach, one of total opposition. In discussions with the AHA, it became clear that the industry’s main concern was that the claim would in some way extend additional benefits to casual employees, or restrict the hospitality industry’s use of casual labour, or impose an additional cost on employers.
The ACTU argued that the provision of unpaid parental leave to long-term casuals is both equitable and cost efficient. It would remove an unjustifiable discrimination against casual employees and assist with staff retention, loyalty and productivity. The ACTU, whilst reiterating its concern at the level of casual employment, made it clear that the claim was limited to the provision of parental leave to casual employees. Ultimately the claim was amended to reflect this intention and the AHA consented to the application.
Following further discussions with ACCI agreement was reached and ACCI announced its intention to support the application. The Australian Industry Group, previously represented by ACCI, then said that it would oppose the application. The AIG’s concerns were numerous and included concerns regarding the right of a casual employee to return to his or her job following a period of parental leave, especially in the labour hire industry.
A series of meetings with the AIG resulted in a last minute agreement, which included minor amendments to the application, once again expressing intent rather than diminution of the benefit provided.
At the time the matter went to final hearing, the only remaining objector was the Commonwealth Government. The Commonwealth, whilst stating that it ‘generally supported’ the ACTU’s analysis of the level and trends in casual employment and did not object in principle, argued against the decision of the Commission being determined as a test case. The Commonwealth argued that if the Commission adopted the claim as a test case, parties seeking variations to the new standard would be required to run a special case showing why the standard should not be adopted for the relevant award or industry.
The Commonwealth claimed that the variety of casual arrangements in various industries and the variety of responses found in awards reflected the individual needs of employers and employees and that consequently no set standard should be imposed.
The ACTU argued that it was appropriate to vary the established test case standard and that in doing so a new test case standard should be adopted. Not to do so, it was argued, would cause confusion and unnecessary cost to unions and employers alike.
Why the Claim was Necessary
The ACTU’s argument that the provision of parental leave to long-term casual employees would provide a benefit to employers through, amongst other things, the retention of skilled and experienced employees and increased loyalty was accepted by employers. It was also conceded that there would be an unfair treatment of, and a cost imposed, upon casual employees if they were not provided with a benefit available to the rest of the workforce. Beyond that, there are a variety of other arguments which supported the basis of the claim.
Parental leave and casual loading
Casual employees are generally paid on an hourly rather than a weekly basis and, under the award system, their wage rate is generally ‘loaded’ to compensate for the nature of casual work (its intermittency and impermanency) and associated non-entitlement to award benefits. The casual loading effectively provides for the ‘cashing out’ of some award benefits, on the basis that the nature of the casual employment effectively precludes access to these conditions.
The lack of access to parental leave by casual employees is not compensated for within casual loadings. The claim by the ACTU did not seek to alter the level or application of any loading for casual employees.
Hours worked by casuals
In order that they may balance work and family life, many women prefer part-time work, or put another way, are often unable to work full-time. As most part-time jobs are offered on a casual basis – 82 per cent of casual employees work part-time – women make up a disproportionate percentage of the casual workforce. While significant and growing number of casuals are men, they tend to work work longer hours than women, many of them on a full-time casual basis. (4)
A 1999 ACTU survey (1999) of 6 770 employees found that 38 per cent of casual employees indicated they would like to work more hours and 25 per cent of casual employees believed that they could not get enough work to support themselves or their family. Furthermore, 59 per cent of casual employees would prefer their current job to be permanent.
Indicators of security
The indicators of relative levels of employment and income security show that casual employment is more precarious than traditional employment:
- Variable monthly earnings – more than 62 per cent of casual employees have variable monthly earnings. This compares with 12 per cent of those in traditional employment.
- More than one job – nearly 10 per cent of casual employees in 1998 had two or more jobs.
- Access to paid leave – less than 3 per cent of the casual workforce had access to any form of paid leave, compared with 100 per cent of traditional employment.
- Duration of casual employment – Wooden (1999) estimates that average job tenure for a casual adult employee is almost 4 years in comparison to a so-called permanent full-time employee, who enjoys a tenure between 6 and 7.5 years.
Precarious employment combined with a fluctuating income combine to restrict severely the ability of casual employees to take out housing and personal loans, often causing further financial and personal hardship.
Balancing work and family
To work full-time, part-time, or not at all? – that is the question. The findings of work and family research described here and in the literature has shown unequivocally that one of the main ways that families juggle work and family commitments is by mothers working part-time. Wolcott & Glezer (1995)
Balancing work and family is an issue of national importance. While the decision to have a family or not is one that is made by both men and women, its impact unquestionably has a greater impact on women.
The reason for women making these choices is no doubt complex, but unquestionably considerations about how easy it is to blend work and family responsibilities are high on the list of factors that women take into account. It is no coincidence that increasingly women are choosing not to have children at the same time that women are entering the workforce in unprecedented numbers.
If we are to deal effectively with work and family balance issues, we have to do so in the context of where and how women work. Women provide primary care for children and this affects work preferences. Indeed, for some women, there may be no choice at all given changes in childcare funding and availability, and work choices and necessities.
Declining fertility rates
Nothing can be of more importance to a society than its capacity to maintain and reproduce itself. This is not occurring in Australia. It is in the public interest that economic and social policy allows men and women both to participate in paid employment and to have children.
Reductions in services to families, the increased cost of child care, the lack of family friendly policies at the workplace and the inability to obtain an appropriate income level and job security have significantly contributed to the decline in Australia’s fertility rate.
Women are having children later in life, are having fewer children and increasingly are not having children. The average age at which an Australian woman has her first child has increased from 26.3 in 1985 to 28.6 in 1995 (ABS 1997).
In the early 1960s the birth rate was one in four for women aged 20 to 29. In 1998 that figure was one in 20 for the age group 20 to 24 and one in 10 for the 25 to 29 group. The ABS now predicts that 28 per cent of women entering their reproductive years will remain childless.
The consequence is that fertility rates in Australia have fallen to an historically low level, from an average 3.55 births per woman in 1961 to a low of 1.76 in 1999. This is below the long-term population replacement rate of 2.1 births per woman. Australian society is not presently capable of replacing its population with natural internal growth.
Between 1986 and 1996, fertility fell by a larger amount for women of low education than for women of high education. This reflects both the direct and opportunity cost of children and the greater likelihood of family friendly policies being provided by employers to working women employed in higher income employment. These women are far more likely to be employed on a full-time and permanent basis than women employed in low income jobs who are more likely than not to be employed on a casual or part-time basis.
Governments and employers can no longer resist the development of family- friendly workplaces, including the provision of basic benefits such as parental leave, without suffering long-term economic loss through the withdrawal from the workforce of the experienced labour and or the inability of the labour force in the long-term to replace itself.
Industrial awards, legislation and social policy are struggling to keep abreast of changes in the nature of the Australian workforce. The level of casual employment in Australia has tripled in the last two decades and continues to rise in all sectors of the economy and across most occupations. Women are 45 per cent more likely to be employed as casuals than men.
Women employed on a casual basis have been disadvantaged in that they are not provided with the protection available under parental leave standards available to full-time and part-time employees. The absence of this benefit can deter a decision to have children or result in downward mobility for women who choose to have children.
In the two decades since the decision in the 1979 Maternity Leave Case, workforce and social attitudes have changed.
The basis of the ACTU’s claim was that it is no longer acceptable that in excess of a quarter of the workforce and a third of all women in the workforce are denied a basic community standard. When faced with the prospect of opposing the extension of parental leave to casuals, employers could not, or were not prepared, to mount an argument that a long-term casual employee should lose her job because she was having a child.
On 31 May the Full Bench of the AIRC handed down its decision. The Commission stated: ‘We consider it is inequitable to deny parental leave to such casual employees while making it available to full-time and regular part-time employees.’
The Commission recognised the overwhelming support for the applications from a diversity of industries and rejected the Commonwealth’s submission that the case not be heard as a test case. A special case will be required to apply different conditions to the new standard.
The Full Bench rejected certain minor amendments sought by the Australian Hotels Association and held that provisions relating to the labour hire industry only need be incorporated into awards covering labour hire employers.
The ACTU’s application was granted in full and a new test case standard for parental leave eligibility has been established. The decision will flow on to awards as applications are made.
1 The Commonwealth Government’s submissions to the Metals casual case estimates the level of full-time casual employees, after excluding owner managers, to be 7.8 per cent in August 1998.
2 Application by the Automotive, Food, Metals, Engineering, Printing and
Kindred Industries Union to vary the Metal Engineering and Associated Industries Award 1998 – Part 1, (Full Bench AIRC, 29 December 2000. M1913 Dec 1572/00. S Print T4991).
3 Full Bench ACAC, 1979, Maternity Leave Case, Print D9576.
4 The average number of hours worked per week by casual employees in August 1998 was 23.3 hours, an increase from 21.6 hours in 1988. The increase in average hours is largely a consequence of the significant increase in male casual employment.
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This paper was published in the AUSTRALIAN BULLETIN OF LABOUR, Vol 27 No.2 June 2001