Employers are drawn to the use of casual employment because it is thought to contribute to lower labour costs and improved flexibility. However, increasing evidence points to the finding that the growth of casual employment is not necessarily a path to productivity or cost-saving, and that there are in fact, a number of hidden costs in employing significant numbers of casual workers.
What is a "casual" worker?
- According to the Australian Bureau of Statistics (ABS, 2006), a casual employee is someone who is not entitled to either paid holiday leave or sick leave while any other employee is permanent.
- “Casual” is an old phrase for temporary employment which refers to workers engaged on a short term (usually hourly or daily basis) with no continuity of service or expectation of permanent employment.
There is disagreement about whether the definition of casual work should be decided on the absence of paid leave, or whether more account needs to be taken of worker perceptions. Nonetheless, statistics based on either of these definitions indicate that casual employment is substantial in Australia.
Casualisation in Australia today
Although the growth rate has stabilised, Australia still has a significant proportion of casual workers. The following figures serve to illustrate this:
- There are currently 2.3 million casual workers in Australia.
- More than one in four (27.9%) of all Australian workers are casual workers.
- 23% of all male workers are casual workers (up from 13% in 1990) and 32% of all female workers are casual workers (up from 28% in 1990).
- Over the past decade, male casual employment has risen by 115% compared with an increase of 43% for females.
Source: Australian Bureau of Statistics (2006)
What effects will WorkChoices have on the use of casual employment?
WorkChoices may have the following effects:
- The WorkChoices legislation would appear to make it easier for employers to convert the status of an employee from permanent to casual or to change the status backwards and forwards. The stripping back of awards and minimum pay setting processes is also likely to mean that the loadings paid to casual workers will be diminished, making them an even cheaper option.
- Flowing on from the last point; the new legislation may make it easier for employers to challenge or bypass federal or state awards and agreements.
- The Workplace Relations Act/Prohibited Agreement Content puts terms and conditions on the engagement of contractors and labour hire workers which could also encourage greater use of labour hire workers.
In making it generally easier for employers to restructure work arrangements, WorkChoices may encourage the use of more temporary workers. On the other hand, the reduced access to unfair dismissal protection may make some employers less reluctant to take on permanent workers.
It is important that employers remember that they still have significant obligations under occupational health and safety (OHS) legislation.
Adverse OHS outcomes of casual employment
Numerous studies in recent years have noted a disparity in outcomes for temporary/casual and permanent workers performing the same tasks. Emerging evidence indicates that casual working arrangements and job insecurity are associated with adverse OHS outcomes such as increased fatalities, illnesses, occupational violence and psychological distress, decreased reporting propensity, fewer training and career opportunities, as well as inferior knowledge/compliance with OHS entitlements, standards and regulations.
Why are casual workers more at risk?
The adverse OHS outcomes of casual workers has been attributed to these three factors:
Economic or reward pressures
Financially, casual workers have been found to have less favourable outcomes than their permanent peers.
- Even with casual loading, casual workers are paid 21% less than permanent workers. The mean hourly earnings for casual workers are $15 (inclusive of casual loading), while the equivalent for permanent workers is $19 (not including sick pay, holiday pay, carers allowance and long service leave).
- Statistics show that 37% of all casual workers want more hours of work because they need the income.
- 61% of casual workers experience variations in their weekly earnings compared to just 18% of permanent workers.
- In addition, casual workers find it harder to get loans or mortgages. Only 35% of casual workers own their own home compared to 60% of permanent workers.
Source: Australian Bureau of Statistics (2005)
Casual workers are more likely to be under greater pressure in terms of competition for work, retention of that work and pressure to earn a liveable income. Due to financial pressures, casual workers may be forced into taking on undesirable or high risk assignments off-loaded by larger organisations.
Disorganised work settings
Quinlan et al. (2001) maintain that increased casualisation results in disorganised work settings. Disorganisation refers to a workplace which may be characterised by:
- Ambiguity of rules, work practices and procedures,
- More complicated lines of management control,
- Inadequate training or supervision,
- Fragmented occupational health and safety management systems, and
- The inability of outsourced workers to organise or protect themselves.
Inadequacy in regulation or compliance practices
A key problem is a lack of inclusive regulations that identify the locus of legal responsibility for proper safety management procedures.
However, the problems associated with casual employment are beginning to be picked up in prosecutions with employers increasingly being held accountable for the OHS of casual workers.
Findings indicate that there is a growing awareness of the particular problems encountered by temporary workers but that, with some notable exceptions, measures aimed to address these issues have been focused on the labour hire industry rather than direct-hire temporary workers.
As yet there is little evidence that OHS agencies in Australia have undertaken targeted enforcement strategies in relation to OHS breaches associated with the use of temporary or itinerant workers (other than those working for labour hire firms). However, regulatory agencies are likely to become more active in this area.
Some employers have already made some efforts to address the issues involved in the engagement of temporary/casual workers. However, too many employers don't seem to have given enough attention to processes such as the communication of OHS guidance materials, training, supervision and induction, incident reporting, and a range of other issues.
New workplace legislation may remove some state based challenges for employers. However obligations under OHS legislation will remain. If employers fail to take these obligations seriously in regards to casual workers, the courts are likely to take a very dim view of this.
Recommendations
In order to minimise the risks posed by casual workers, it is advisable that employers:
- Ensure that casual workers receive adequate training, induction and supervision. Casual workers are often only provided with basic induction training. If their incorporation in the organisation’s internal OHS management systems is superficial and problematic, the use of casual workers can further contribute to disorganisation and adverse OHS outcomes.
- Facilitate further worker participation and representation among casual workers. A number of Australian studies have found a positive relationship between worker representation and improved OHS management arrangements, concluding that the introduction of health and safety representatives led to major changes in attitude.
- All parties must be aware of the locus of OHS duties and responsibilities. For example, labour hire agencies and host employers share a responsibility to provide a safe workplace and to provide their workers with relevant training.
- Conduct ongoing risk assessment and monitoring of casual and permanent worker activities. Employers should incorporate continuous risk assessment and monitoring of casual and permanent workers as it is essential to ensure that they adhere to OHS management systems (e.g. continuous communication and feedback loops).
- Focus on psychosocial issues. OHS agencies are increasingly addressing work organisation issues, also known as psychosocial issues. Employers need to address these in terms of potential litigation. Costs of psychological injury claims are significantly higher than other injuries because they tend to involve longer periods of time off work and higher medical, legal and other claim payments.
- Ensure clarity in communication and reporting systems, work practices and procedures as well as facilitating knowledge and compliance with OHS Policies and Legislation. The use of agency workers and other casuals, creates more complicated lines of management control and fragmented occupational health and safety management systems leading to ambiguities, confusion and more adverse OHS outcomes.
- Awareness of at-risk groups. Employers should be conscious of the fact that many casual workers are young and work part-time. These workers are especially at risk of adverse OHS outcomes. A current study of the OHS inspectorate reveals a high level of concern regarding labour hire workers. Labour hire is viewed as a particularly problematic area.
Employers should be mindful of the dangers and risks inherent in the employment of these groups. Additionally, employers in industries characterised by a particularly high rate of casual workers should be encouraged to take the added risks of casual employment into account and take additional measures when designing OHS management systems.
The use of casual workers can cause a number of problems, many of which have been outlined in this report. It would be advisable for employers to consider the best interests of their organisation by becoming aware of the potential risks associated with the employment of casual workers.
Subsequently employers should consider the costs involved in minimising these risks and factor these into the everyday running costs of their organisations.
Employers need to make more considered judgements about where, when and to what extent to use casual workers, taking account of all the costs and benefits. It is possible, with consideration and planning to have the benefits of a casual workforce but at the same time, reduce the associated risks.
This research was sponsored by Sydney based law firm Bartier Perry which has a strong workplace relations practice, and a number of clients with a significant percentage of their workforce employed on casual terms. Bartier Perry sponsored the research as part of its commitment to assisting clients to understand and adequately respond to OH&S risks.