Coalition’s war on casual workers a harbinger for assault on permanent workers

by | Dec 18, 2020 | Economy & Markets

The workplace abuses of the 18th and 19th centuries have returned under the guise of the gig economy. The Morrison government has now proposed sweeping changes to labour laws that will cut wages, entrench precarious work, cripple unions and hand absolute power to bosses. But the assault on casual workers is just the beginning. If the IR bill becomes law, permanent workers will also be affected. Alison Pennington reports.

Scott Morrison is giving workers and unions a class war — just in time for Christmas.

Company profits are up nearly 19 per cent since 2019, thanks to pandemic stimulus spending. But it’s never enough – for businesses or the Coalition. So, the Minister for Industrial Relations, Christian Porter, has introduced the Industrial Relations (IR) Omnibus bill.

A withering pro-business offensive aimed at slashing wages, the plan will inflict a double wound on workers, by degrading the Awards system (which sets minimum wages and conditions across industries) and by weakening what little remains of unions’ collective bargaining power.

Never let a crisis go to waste

Thanks to four decades of neoliberalism, unions have been weakened. As a result, abuses that we associated with the 18th and 19th centuries have returned, such as piece work, at-home work and the dictatorial control of gang masters over who did and did not work. The abuses are just dressed up in new packaging — as with the “gig economy”.

Today, 2.6 million workers – one in every four – are defined as “casual”. This means no right to ongoing work, and no basic holiday or sick leave entitlements.

While this is justified by the claim that casual workers receive extra pay (“casual loadings”) to compensate, this is a myth. Most casuals are in fact much worse off.

One third receive no loadings, and most casuals are paid about the same as permanent workers in the same jobs. In industries with a high casual workforce, the premium is around 4-5 per cent — nothing like the oft-cited figure of 25 per cent.

Bosses love to praise the virtues of “flexibility”, claiming that casuals don’t want permanent work. But this is also a lie — half of all casuals have worked regular shifts for one year or more.

Casual work used to be about allowing firms to employ a few extra workers on a seasonal basis. Now, casual work is increasingly the way businesses meet their medium- and long-term labour needs. And, in the post-COVID era, they increasingly see casual labour as the foundation for boosting profits.

Walks like a duck, talks like a duck…

Two recent major court cases found that businesses that employ casuals on regular, stable and predictable schedules are liable to pay leave entitlements.

In response, business lobbyists unleashed campaigns to “resolve the definition issue” so as to avoid court-ordered repayments. This — and the growing importance of casual work to profits — explains why Morrison and Porter have made entrenching casual work the cornerstone of their IR Omnibus bill.

They define casual work in the broadest possible terms. Any job deemed casual by the employer will be, legally, a casual job. Your job can look like a permanent job and smell like a permanent job — but employers will still be able to legally engage you as a casual and strip your legal entitlements at will.

To most Australians, the pandemic highlighted the dangers of insecure work. But for the Coalition and their business allies, it changed nothing.

Treasurer Josh Frydenberg announced JobMaker — a payment that directly subsidises new, insecure youth jobs and will allow bosses to sack existing, more expensive and older workers.

It is interesting that the JobKeeper subsidy is set to end in March, exactly when Porter’s wage-cutting tools are due to kick in. Employers will go on the offensive, recouping lost public subsidies by taking even more from their workers.

BossKeeper: how JobKeeper lined the pockets of top ASX directors, executives and shareholders

The bill’s supposed sweetener is that employers will be required to offer casuals permanent work if they have been employed for 12 months, with six months of continuous regular hours scheduling. Not only will it be easy for employers to vary hours and schedules to avoid meeting that high benchmark, they will also be allowed to refuse to make an offer on so-called “reasonable grounds”.

The government made sure to define “reasonable” in incredibly broad terms and to deny workers the right to appeal a decision through the Fair Work Commission. Got a problem with your employer’s decision? The Federal Court will hear your case — but only if you have a spare ten or twenty thousand dollars lying around.

Deregulating permanent work

Accelerating the growth of insecure work is also about cannibalizing protections for the permanent workforce – by making permanent jobs resemble casual ones. New “part-time flexi” reforms will let bosses employ permanent part-time workers as though they were casuals.

Only 16 hours will have to be paid according to normal permanent rates, while an additional 22 hours (comprising a working week of up to 38 hours) will not attract overtime loading. This threatens hard-won rights that deliver stable schedules for permanent part-time workers.

With 22 hours of ordinary-time labour up for grabs, employers will be able to regularly work these “part-timers” like full-timers — as supervisors and managers, for example. But they won’t have the security of regular hours or receive overtime compensation for being at the employer’s beck and call. Blissful flexibility — for bosses.

For all the Coalition rhetoric about “job creation”, this wholesale deregulation of working hours really means that bosses will be able to cheaply increase hours for existing workers in line with fluctuations in demand. That will free them from having to hire more people.

But the glossy marketing doesn’t cover this detail. Low-wage work will be expanded under the guise of “roads to permanency”. But when you cut through the spin, the Coalition’s agenda is to reduce the incomes of millions and to deny millions more decent jobs.  In the middle of a recession, the Coalition is arming employers with powerful weapons to cut wages and conditions in the jobs that remain.

Permanent damage to living standards

Worst of all, the IR Omnibus bill contains changes to laws governing enterprise agreement (EA) making. Businesses will be able to draw up workplace agreements by themselves more easily — that is, without a union. With these non-union agreements, businesses will be allowed to undercut the minimum rates and conditions outlined in industry Awards. Wages can also be locked in for eight years at a time through such enterprise agreements.

The Coalition’s plan will allow employers to bypass the Better Off Overall Test (BOOT) for two years. The BOOT ensures that new agreements do not leave workers worse off than under minimum Award conditions.

The move is straight from the wish list of business lobbyists. It will open a floodgate of non-union below-Award agreements that will permanently damage living standards.

Handing employers such unilateral power over enterprise agreement wage-setting was the cornerstone of former Liberal PM John Howard’s infamous WorkChoices legislation. Under WorkChoices, the “No Disadvantage Test” was abolished and unions were denied the right to contest agreements, leading to an explosion of non-union agreements. Between 2004 and 2009, the proportion of non-union agreements approved in the private sector rose from 20 to 60 per cent.

After 2009, when WorkChoices was partly rolled back, the number of dodgy agreements dramatically declined to pre-Howard levels. Why? Because as part of the Fair Work Act, the Better Off Overall Test was introduced.

Even so, the non-union, low-wage agreements of the WorkChoices-era had a lasting, negative impact on wage growth. “Zombie Enterprise Agreements (EA)” persisted for years. For example, Merivale, a Sydney hospitality empire, paid more than 3000 staff up to 20 per cent below Award wages on an expired non-union enterprise agreement set in 2007 for more than 10 years.

Enterprise agreements live on, sometimes for years, until they’re replaced or terminated — usually on request by unionised employees. Today, tens of thousands of workers still languish on Howard-era below-Award enterprise agreements.

Vast gift to capital, at workers’ expense

The Fair Work Commission has the power to change and approve agreements so long as employees remain better off overall, compared to the relevant Award. The FWC may also approve agreements with below-Award conditions in “exceptional circumstances”, provided they meet the overall public interest.

The IR Omnibus bill will weaponise the “public interest test”, enabling business to push even harder. The Coalition’s hand-picked business leaders in the FWC will surely oblige.

Australian business and their allies in the Coalition have dedicated enormous resources to crushing what remains of collective bargaining – a testament to the labour movement’s past victories.

This is why the Coalition also wants to introduce eight-year agreements on new projects valued at more than $500 million or $250 million, if the project is of national significance. If the BOOT is scrapped, employers could draw up greenfields agreements undercutting Award conditions for up to eight years, circumventing unions and simply hiring a new workforce.

Since Australia’s draconian anti-union laws prohibit industrial action at any time outside an EA bargaining period, eight-year agreements give employers the power to block strikes as well as cut wages. There’s also a political logic to it: this strategy guards against any campaigns that link unions with other elements of civil society. Unions will face crippling fines for striking at any time during the eight-year period to support campaigns against new mining projects, or inappropriate development, for example.

The Coalition is also bolstering the power of the courts and the anti-union Australian Building and Construction Commission to inflict huge fines on unions for activities that are entirely legal in other democratic countries.

It couldn’t be clearer. This is a vast gift to capital, purchased at our expense.

A common enemy

Only 8 per cent of union members are casuals. Workers living in permanent precariousness and intermittent poverty are less likely to join unions. But when the bargaining power of unions declines, all workers suffer.

By expanding casual work, the IR Omnibus bill will strike the most comprehensive blow to wages and living standards in years, both now and in the future. This is why the union movement must resist insecure work everywhere.

We need unions and members willing to build power among existing, permanent workers who are in a better position to endure the risks of industrial action. Permanent workers also need to join the fight because the growth of precariousness means that even secure workers are on increasingly unsteady ground.

Reviving unions after years of decline will require determined efforts to rebuild a modern workers’ movement with deep support and social roots. This will mean working with climate action, anti-poverty, welfare rights, and other social justice and community organisations.

Just as we protected ourselves against the corona virus, now we must protect ourselves against another virus that would irreparably damage the quality of workers’ lives in the name of higher corporate profits. That virus is insecure work. It’s lived among us too long — it’s high time we shut it down.

This is an edited version of an article that was first published in Jacobin.

ABOUT THE AUTHOR

Alison Pennington

Alison Pennington

Alison Pennington is Senior Economist with the Centre for Future Work, associated with The Australia Institute. She conducts research on economic issues facing working people including the future of jobs, skills and training, collective bargaining, and the role of government. She considers economics a powerful tool for reinvigorating ideas about how society is organised, and a natural home for building a more democratic and meaningful life for working people. Twitter handle: @ak_pennington

8 Comments

  1. Avatar

    Alison, I have been a close follower of your work from the time I heard you discussing Zombie contracts with Geraldine Doogue and John Buchanan on Saturday Extra. Thanks for another very important article.

    When Sally McManus first agreed to discuss “streamlining” the EBA process I thought what could workers possibly give away. I was central to EBA negotiations for a small branch of the NSW Nurses and Midwives Association. The process was tortuous but also ultimately unrewarding. The employers have the dominant position now.

    If this bill goes through we will be approaching James Buchanan’s Chile. What sort of country do we live in where strikes are effectively illegal?

    • Avatar

      James ‘public choice theory’ Buchanan…., along with (also now deceased) white nationalist anti-semite John ‘passive eugenics’ Tanton (collaborator of Paul ‘population bomb’ Ehrlich at fossil fuel supported ZPG, and advised SPA in Oz); the two ‘most influential unknown men’ in America (who appear to have crossed paths at the now Koch influenced ALEC, the fulcrum of nativist conservative &/or libertarian policies and tactics).

      Radical right libertarian (socio)economic joined at the hip with white nationalism, using conservative and evangelical Christians to vote against social issues e.g. LGBT, climate policies, refugees, immigration etc. thus allowing libertarian objectives to flourish without constraints (in the background away from public scrutiny). Or in other words more agressive forms of Smith and Malthus drawing upon 19thC master serf relationships and the eugenics movement (which has more to do with social pecking order or class)?

      The ideas of both, after two generations, now dominate ‘Anglospehere’ social, economic and political narratives, ably supported by (NewsCorp) media etc., IPA/IEA (UK) and older voter demographics; UK gets Brexit, US gets Trump plus a stacked Supreme Court, while Australia now has freedom and liberty for corporate entities to flourish at the expense of citizens and rights….

  2. Avatar

    “The workplace abuses of the 18th and 19th centuries have returned under the guise of the gig economy”
    Exactly!

    And of course, there has been that long game between those that are known as ‘Permanent’ and those that are labelled as ‘Casuals’ but work full time anyway, work harder due to the precariousness of their tenure and without the benefits of ‘Permanents’.

    As usual, divide and conquer rules, however as with Covid-19 many who thought that they were ‘untouchable’ have found out otherwise.

    When it gets down to basics, we all feel, we are all vulnerable, we are all someone’s child, parent or grandparent and life turns on a dime.

    So, the question that begs to be asked is, ‘Why this Class War’? Thus far, new market entrants are subjected to ‘internships’ with a view to more ‘permanent’ work, and the ongoing merry go round for casuals to attempt to gain 38hrs thru all options is a mirage. I know, I did this for four years when working in Market Research for a number of organisations and finally found some stability with one employer rather than five, even though I was initially working for the dole on the week-ends. Found a better project and better manager as well, and it helps if you have some understanding of historical Awards and EBA’s.

    It’s way past time for these alleged ‘business’ geniuses to stand on their own two feet, and on the face of it with all their ‘legal’ get out of jail cards, that’s near on impossible. It’s the structure of these laws that keep businesses where they are.

    Rather than being a hapless bystander, we are heading into an Election year in 2021 for July or August, and that is the time to remove these cancers on our society and our environments, once and for all.

    The other ‘alternative’ is for those who know their values and skills base to commence crafting their own business interests, either that, or we enforce the ‘modern’ versions of Magna Carta or The French Revolution.

  3. Avatar

    The changes seem unworthy of the society we Australians kid ourselves is still dominant.
    However, it is also true that the Australian economy has been allowed to gravitate towards commodities at the expense of value added production, in the name of efficiency. This means that those in business are driven by short term profits and price, rather than commercial longevity and innovation.
    The fault for this long term trend lies across the board, poor government policy settings and investment priorities, poor management, and erosion of education in it broadest sense ( a critical factory also being accelerated by this government).
    This bill is simply an extension of this policy and creative paucity from both business and government.
    On the bright side, if Australian advanced manufacturing ever gets off the ground, and if it does not, our grandchildren are truly stuffed, the presence of those laws offers intelligent businesses that need the intellectual and creative capacity of its stakeholders, particularly employees, a huge potential competitive advantage, simply by being a good employer.
    I suspect this will be particularly the case for SME’s who are disadvantaged in the employment stakes by bigger rivals.
    That minor potential benefit does not in any way negate the corrosive impact of these intended changes.

    • Avatar

      Agree, antithesis of Labor policy from the ’80s looking more to northern Europe for inspiration and Asia for our future and prosperity through more value added and services…. Now, we have legacy industries, including energy, mining, corporate ag, media, etc. calling the shots, ably supported by US linked think tanks like IPA and hollowing out institutions plus education curricula.

      Meanwhile value added companies like CSL, Cochlear, Atlassian, Canva etc. and numerous SMEs, fly under the radar and we are bombarded with ‘white male worker’ imagery of hard hats etc. that indirectly supports old industries and the nostalgia for the past by an ageing electorate.

      Worse, some of the extreme libertarian conservatives, whther US or Oz, want this to become permanent by precluding new industries, innovation, voters, empowered citizens etc.

  4. Avatar

    Don’t forget the scourge of labour hire, which reduces labour to a commodity.

    Such is the hubris of the Liberal Party, and the electoral weakness of the ALP, that the government can do such harm to working people with electoral impunity.

    Until people who work of a living vote for their best interests, and not someone else’s franking credit refunds, you can expect your working conditions to continue to deteriorate.

    • Avatar

      Agree Alan, if the ALP are in any way keen to run the country they would get right behind killing this bill and supporting full time work and kill off 21st century slavery that is called Labour Hire.
      Time the people had an equal say in this country. But until this Right Wing Government is outed, hopefully for a long time, then there is little hope for workers or for future generations to enjoy a normal life like people my age have enjoyed.
      We should be embarrassed at leaving working conditions that exist today for our kids and grand kids.

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