Employers will be charged a levy to account for the reported $245 million scheme
by Baker McKenzie Employment Partner, Kellie-Ann McDade
Daniel Andrews' announcement this week of sick leave for casual employees has been met with equal parts praise from trade unions and infuriation from employers.
Under the proposal, the Victorian State Government plans to provide 5 days sick leave paid at minimum wage to employees in certain industries like retail, hospitality and cleaning for a trial period of 2 years. After that time, employers will be charged a levy to account for the reported $245 million that the scheme would cost taxpayers.
It makes sense that in the COVID era sick employees are properly discouraged from attending work while unwell. However, what this proposed scheme overlooks is the uncertainty that it will create around the meaning and future of casual employment.
While a university student, I coveted my weekend casual retail job. I was incentivised to work casually because it suited my lifestyle and I was attracted to the Sunday and public holiday penalty pay at casual rates 25% higher than permanent rates. Those rates were worth more to me than permanent employment entitlements like annual and personal (sick) leave and regular and predictable hours. The flexibility in hours was mutually beneficial.
The trade union movement claimed on Monday that the casual loading is paid to casuals compensate only for insecure work. That is simply incorrect and insecurity is not the reality for many industries that rely heavily on casual workers. The casual loading has been developed under industrial law to compensate for the loss of permanent employment entitlements, most notably leave entitlements.
In a major recent development, the High Court of Australia has reiterated the primacy of the contract of employment. In other words, the highest Court in the land recognises that an employee and employer can decide to enter into an agreement on the nature of employment that suits them and the Court should give effect to what the parties have agreed.
Where does that leave employment law in circumstances where Federal law provide for a casual loadings but State Government schemes are likely to undermine the very purpose of that loading by providing sick leave? Won’t casual workers be double dipping at taxpayers' expense (for the first two years) and then employers' expense at a moment in time where we are trying to stimulate the local economy?
If the aim of these Andrews Government's changes is to reduce the demand on casual work, my view is that they will be successful. The nature of casual work is that an employer needs that work performed on the day. If a casual calls in sick, the employer will need to call in another casual to perform that work. Under this trial, that will mean that the employer will be (at least indirectly) paying for two casual workers on that day.
This scheme is likely to cause businesses in certain sectors to restructure their workforce and move away from casual workers in many of the areas that workers actually like (and often prefer) to work casually. Instead, we might expect to see an increase in "insecure workers" as employers turn instead to financially manageable alternatives like on-demand labour hire.
