Killing casual work is wage theft

The Albanese government has passed new laws that will effectively kill off casual work as it's currently known in Australia. The outcome will be lower incomes for low-paid workers.

One of the ‘onerous’ tasks I’ve allocated to myself so far this year has been to assess the Albanese governments ‘Loophole’ Bill Number 2. And when I say ‘onerous’ I mean it. The Bill, now an Act having received assent on 26 February, is 286 pages of droning, mind-numbing, process obsessed content. The 86 page Explanatory Memorandum is worse!

But, the Act is significant and needs to be understood. The impact will be long term on how Australians are allowed to work and how we, particularly self-employed people can conduct our own businesses. What I’m going to do over the next few weeks is to break the Act into content ‘chunks’ and seek to explain it in a way that we ‘ordinary’ people can understand.

In this first analysis I’ll look at the impact on casual work. In summary, the Act effectively makes casual work as we have known it for decades, to be unlawful. I explain below.  

For those of you who have followed me during last year you’ll be aware that I’ve held significant concerns about the content of that Bill in its original form. I posted analysis on aspects of the Bill.  Here’s the post/analysis I did warning about the trashing of casual work.

I’m sorry to say that the Bill, now passed and now an Act will have the effect I warned about and I predict will come to pass. Casual work as currently known has effectively been outlawed. Here’s why. It’s simple.

The definition of what is now lawful as casual work is so confusing, so narrow, so legalistic and so open to wide interpretation that I defy any normal person to know what it means.

In effect anyone running a business, including if the business is just you and you want to employ just one person, doing this so that you are clear that you are ‘legal’ will be near impossible. Frankly I think that even specialised employment lawyers will be guessing.

That’s my assessment but see what you think. Here’s the definition in the Act.

(Link to the Act is here)   

15A  Meaning of casual employee

(1)              An employee is a casual employee of an employer only if:

         (a)              the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and

But  what does ‘absence of a firm advance commitment etc…” actually mean? This is subject to interpretation under 15A(2) with the most imprecise being (a) (c). That is ‘absence of a firm advance commitment etc…” is to be assessed based-

15A(2)  

(a) on the basis of the real substance, practical reality and true nature of the employment relationship; and

c) having regard to, but not limited to, the following considerations (which may indicate the presence, rather than an absence, of such a commitment):

  (i)   whether there is an inability of the employer to elect to offer, or not offer, work ….

(ii) whether, having regard to the nature of the employer’s enterprise, it is reasonably likely that there will be future availability of continuing work …..

(iii)   whether there are full‑time employees or part‑time employees performing the same kind of work in

My conclusion on this wording is that I’d defy anyone to be certain in employing a casual, other than for a day or two, that you were complying with the law.

I discuss this further below and why this is now a legal and practical quagmire of confusion.  But note. I’m not a lawyer so my views here are not legal or other form of advice. My assessments are based on what I hope is a common sense, clear reading of the words in the Act.

So who will be hurt here? The big business associations have cried that this will harm workplace and business ‘flexibility.’ That’s true. But the real impact is on low-paid casual workers. To comply with the law businesses (even the smallest businesses) will need to stop using casuals and only use full-time or part-time employees. This will mean a major reduction in income for workers.

I explained this in my post in October last year.  And I pushed this issue hard in my advocacy efforts in Parliament last year. But no-one seemed to care.

The facts are straight forward. If you’re a full time or part time employee you have an ‘entitlement’ to holidays and so on. In fact these ‘entitlements’ are income withheld from you to be paid at another time (when you take holidays). These ‘entitlements’ add about 19% to your hourly rate. So $100 pay is really worth $119.

Casuals receive 25% extra. So the $100 is worth $125 to a casual which they receive ‘in hand’ when they work. The majority of casual workers under this Act will be forced to be full or part-time employees, earning around 6% less than they would as a casual. I explain this in more detail in my October post.

What gets me is that for some reason this is supposed to be ‘social justice’ where workers are being looked after. The hypocrisy is staggering. Apparently it’s social justice to create law where workers will be paid less.  But there it is. That’s politics for you.     

I now explain in more detail how the Act will actually function in relation to deciding whether in running a business you have ‘legal’ casuals. (A quick note that these casual provisions don’t come into effect until 26 August this year, 2024)