Insecure Work and the Casualisation of the Workforce

Insecure Work and the Casualisation of the Workforce Professor Andrew Stewart Piper Alderman and University of Adelaide 2018 Clubs Australia Industrial WR & HR Conference Sydney, 17 August 2018

The problem of insecure work ‘Australia has the third-highest rate of non-standard forms of work in the OECD. We are rapidly heading towards the complete Americanisation of our workforce unless we change direction. Around forty percent of all workers have fallen into insecure work, are part-time or on short-term contracts, are employed through a labour hire firm, the new “gig economy” or as supposedly “independent” contractors. ’ – ACTU, ‘Australia leading the world in creating insecure work’, media release, 21 May 2018

The problem of insecure work ‘The traditional employment relationship, based on permanent, full-time work with normal entitlements (such as paid leave and superannuation), has been chipped away on many sides. Today, for the first time in recorded statistics, less than half of employed Australians work in a permanent full-time paid job with leave entitlements. ’ – Tanya Carney & Jim Stanford, ‘The Dimensions of Insecure Work: A Factbook’, Centre for Future Work, 29 May 2018

But how big a problem is it really? The ‘ 40% in insecure jobs’ estimate overstates the problem > not all casuals, part-time workers or independent contractors lack job security, or worry about it Claims about growth in some of these categories of work are not born out by official statistics Yet there may be some important trends not being picked up in those statistics, especially in relation to indirect employment and gig work

Overview of presentation Look at casual employment, and some of the legal issues associated with it Plus, more briefly, at (permanent) part-time work, independent contracting, gig work and labour hire What might a future Labor government look to do about these issues?

Casual employment Around one in four Australian employees work as casuals > that proportion hasn’t changed significantly in last two decades > but still strikingly high by international standards > reflects freedom of employers under awards to engage what are really permanent employees as casuals, simply by designating and paying them as such > more than half all casuals stay in their job for over a year > and 60% have the same hours each week

Casual employment Loading of (usually) 25% compensates for lack of annual leave, paid personal leave, notice of termination, redundancy pay But casuals do get other benefits > eg long service leave, parental leave > superannuation (if they earn enough each month) > overtime pay (added to Registered and Licensed Clubs Award 2010 cl 10. 5(e) following decision in 4 Yearly Review of Modern Awards – Casual Employment and Part-Time Employment [2017] FWCFB 3541)

Who exactly is a casual? In strictest or ‘true’ sense, casual employment is informal, uncertain and irregular Awards and enterprise agreements typically define a casual as anyone ‘engaged and paid’ as such But Fair Work Act 2009 has no general definition So it’s possible someone might be a casual for award purposes, but not for other parts of the Act

Who exactly is a casual? A potential disaster for employers – a casual might leave their job and then claim unpaid annual leave, etc According to the Fair Work Commission, this can’t happen, because once an employee is a casual for award or EA purposes, that is their status for all other purposes > see eg Telum Civil (Qld) v CFMEU [2013] FWCFB 2434 But some courts have disagreed! > see eg Williams v Macmahon Mining Services [2010] FCA 1321, Skene v Workpac Pty Ltd [2016] FCCA 3035 > see also Apostolides v Mantina Earthmovers & Constructions Pty Ltd [2018] FCCA 279

Can a casual complain of unfair dismissal? Fair Work Act s 384(2)(a) makes a casual eligible to complain of unfair dismissal if they were employed on a ‘regular and systematic basis’ for at least 6 (or 12) months, and had a ‘reasonable expectation of continuing employment’ In the past, some claims have been rejected because the casual was not ‘dismissed’ (s 386(1)), but simply not offered further employment But Khayam v Navitas English Pty Ltd [2017] FWCFB 5162 suggests a failure to offer expected work can be regarded as a termination of the employment relationship

Casual conversion Award-covered casuals employed for at least 12 months may request conversion to permanent position, employer can refuse only on reasonable grounds > established feature of some awards, including Clubs Award cl 10. 6 > extended to most other awards in Casual Employment and Part. Time Employment case > but in the past at least, few casuals have sought conversion – hard to see this changing

Casual conversion Where a casual takes up permanent employment, does their time as a casual count in calculating service-related entitlements? > for redundancy pay purposes, compare different conclusions reached in AMWU v Donau Pty Ltd [2016] FWCFB 3075 and Unilever Australia Pty Ltd v AMWU [2018] FWCFB 4463 > but clearly no for annual leave, given s 86 of the Fair Work Act

Part-time employment 40% of Australian employees work less than 35 hours per week > more common for women (54%) than men (25%) For most purposes, part-time employees get the same benefits and protections as full-time employees Two key decisions from modern awards review > rejection of ACTU claim in Family Friendly Working Arrangements [2018] FWCFB 1692 for right to change working hours > Casual Employment and Part-Time Employment case, inserting more flexible provisions for permanent part-time employment in Clubs Award

The new part-time employment provisions in the Clubs Award Part-time employee must still have ‘reasonably predictable hours’ Parties must agree number of hours to be guaranteed each week or over roster cycle > may be changed only with employee’s written consent > employee may request increase where regularly working more than guaranteed hours for at least 12 months Employee cannot be rostered for hours outside their availability and must have at least 2 days off per week Employee may give 14 days notice of changed availability through genuine and ongoing change of circumstances, with guaranteed hours to be renegotiated if necessary

Independent contractors 9% of employed persons work as independent contractors in their main job > no real change in past two decades > but research also shows 25– 40% of contractors are ‘dependent’ on getting work from a single client > and sham contracting (disguised employment) seems to be rife in certain industries, including building and construction, road transport, cleaning, security

The dangers of sham contracting Whether someone is an employee is based on an impressionistic ‘multi-factor’ test Until recently, carefully drafted contracts could disguise an employee as a contractor by minimising the ‘indicia’ of employment But federal courts and tribunals have become more likely to look at substance and reality of a work arrangement in determining whether a worker is an employee, since High Court’s decision in Hollis v Vabu Pty Ltd [2001] HCA 44

The dangers of sham contracting Plus s 357 of Fair Work Act prohibits an employer from misleading an employee into thinking they are a contractor > but defence for employer that proves it didn’t know, and wasn’t reckless as to, true nature of relationship Fair Work Ombudsman has been very active in enforcing this provision Note penalties imposed are in addition to any benefits payable by reason of employment status to misclassified worker

Gig work Increasing amount of ‘gig’ or ‘on-demand’ work being arranged through digital platforms Estimates of prevalence in Australia tend to be low, but note major recent EU survey > average of 5. 6% of respondents across 14 countries made ‘significant’ use of digital platforms to perform work (working for at least 10 hours per week or earning at least a quarter of their income) Other research suggests platform workers tend to have hourly incomes well below minimum wage rates

Gig work Generally asserted that gig workers aren’t employees, but in some cases that is debatable > rulings re Uber drivers in Kaseris v Rasier Pacific [2017] FWC 6610 and Pallage v Rasier Pacific [2018] FWC 2579 carry little weight, because drivers weren’t represented and didn’t challenge Uber’s evidence > but more to come, including FWO v Foodora Where platform does no more than facilitate contact and payment between worker and end-user, unlikely platform is an employer – but the end-user might be

Labour hire Statistics suggest proportion of Australian workers engaged through labour hire agencies is only 2 -3% But that may mask prevalence of ‘indirect’ or ‘fissured’ employment through related or unrelated service companies, outsourcing or supply chains In any event, concern about role of labour hire in exploiting workers in certain industries has led to State licensing regimes in Queensland, South Australia and Victoria

Policy responses? Turnbull Government has addressed wage theft and exploitation of workers in franchises through Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 > but no sign of any interest in going further ALP, by contrast, is promising > crackdown on sham contracting > national labour hire licensing regime and right of equal treatment > ‘objective’ definition of casual employment > consideration of new rights (? ) for gig workers

Questions?