• John McDonnell

Labour market reforms threaten workers’ rights


ACTU President Michele O'Neil addressing Brisbane's Labour Day rally earlier this year

The labour movement is concerned about the implications of the ‘gig’ economy. The opposition and the ACTU are concerned about the increased casualisation of the workforce, arguing that it leads to a degradation of workers pay and conditions.


Australia’s leading labour economist, Professor Mark Wooden, estimates that 20 per cent of Australia’s workers are casuals. These are in addition to people who are employed as independent contractors.


Some of these independent contractors, such as people employed in the information technology or construction sectors, can be very highly paid. Others, such as delivery drivers, are paid below the minimum wage.


The ACTU is concerned about two aspects of casual work: job security and workers' pay and conditions.


These concerns have been exacerbated by lockdowns during the pandemic; as a result of which many casuals have lost their jobs, even if just temporarily.


The ACTU is proposing that all workers should be guaranteed minimum pay and conditions including guarantees of secure employment, sick leave and holiday pay. The effect of this would be to make casual work a form of permanent employment.


It is not clear that this would meet with the approval of all casual workers. Many of these workers are attracted to casual work because it gives them flexible working arrangements, enables them to do two or three different jobs and attract a loading that gives them additional take-home pay.


Professor Wooden argues, in an article in the ‘Financial Review’ on Thursday, that greater regulation of casual work is likely to lead to its marginalisation within the labour market. This means that its advantages for people, such as working parents, will be lost. It will also limit the number of people able to take on multiple jobs. This has significant implications for future productivity.


It also has implications for the education sector. Many tertiary students rely on casual work to sustain themselves during their studies. If these opportunities are not available, then they will probably drop out of their degrees.


Since 2019 it has been possible to modify casual employment under an award to make it permanent if the worker has worked for more than12 months on regular hours.


Since the latest IR reforms passed parliament this year, the onus is on employers to show why permanency should not be granted. However, as the ACTU has pointed out, there are loopholes that enable employers to avoid this obligation.


Reforming the labour market to eliminate the problems associated with casual work involves consideration of a range of complex issues. A draconian policy that effectively eliminates casual work would have substantial implications for productivity and workforce participation.


The intergenerational report showed that without increased productivity and participation, Australia’s standard of living will decline over the next forty years.


In the circumstances, this is a matter that needs to be approached carefully.


As a principle, it is better to allow people to maximise choices about their lives and employment rather than restricting those choices. We should avoid a situation where a solution that benefits a few is introduced at the expense of the many.