There are few parts as instrumental to a retail business’s success as its employees: from floor associates and salespeople, to warehouse workers. Many of the employees in these positions are students – or those working second jobs – and opt to sign a casual employment contract in order to gain the flexibility they require in their personal life.
Likewise, retail businesses may wish to have casual employees to call up with little notice in order to facilitate better customer service during periods of peak demand, such as weekends and, most notably, over the Christmas period.
Taking such a contract typically comes with its downsides, such as restricted leave entitlements, which are offset by its advantages, such as higher pay rates and the ability to pull out of a shift with little to no warning.
However, according to the Shop, Distributive and Allied Employees’ Association, casual workers are beginning to be used in a more permanent capacity, “without access to sick pay, annual leave, job security or eventual access to permanent employment”.
“There is no doubt this unjust treatment of casual workers must be addressed as soon as possible. A clearer definition of casual employment would be a real step forward,” said SDA national secretary Gerard Dwyer.
The Australian Labor Party has proposed to do just that, in an effort to clear up the confusion surrounding the rights to which casual employees are actually entitled to.
The evolution of the casual employee
It is important that the retail industry understand the context and meaning behind these changes – and the changes that have already taken place.
In July 2017, the Fair Work Commission (FWC) granted casual employees the right to request permanent employment – provided they work regular hours over the course of 12 months – with the change taking effect in October 2018.
This was a more flexible version of a union-led campaign to install mandatory conversions of casual staff with regular work schedules to permanent positions after six months with an employer.
In December 2017, the Australian Council of Trade Unions (ACTU) launched a campaign with the intent of reducing the rising casualisation of the workforce. As part of this campaign, ACTU secretary Sally McManus told Fairfax Media that the group would push the Labor Party to objectively define what “casual employment” means – a weakness in the Fair Work Act.
“What we would want is the commonly understood and old definition of what casual employment is: if you have a reasonable expectation of ongoing work, you have been working regular shifts, you shouldn’t be defined as casual,” McManus said.
“You should have all the rights of permanent employees.”
On January 1, 2018, an FWC decision varied overtime rates and minimum shift entitlements for casual and part-time employees, with the change meaning casual retail workers would be able to claim overtime pay after working more than, or an average of, 38 hours in a week.
Casual employees would also be entitled to overtime if they worked outside of the span of ordinary hours, or more than 11 hours on one day of the week, with subsequent days needing only nine hours of work to trigger the higher rate.
WorkPac v Skene
The decision that would have the largest ripples into the casual employment debate came about in August 2018, with the Federal Court upholding an earlier decision that a casual employee, who had worked regular hours and was paid casual-loading rates, was entitled to annual leave back payments upon termination.
The employee in question, Paul Skene, was found to be entitled to an annual leave payout from labour-hire firm WorkPac upon termination of his contract employment, which totalled $21,000 plus $6700 in interest.
The decision opened a can of worms, according to the National Retailers Association, which noted the potential of retail employees being able to “double dip”, and earn the higher wages afforded to casual employment without losing the entitlements normally only afforded to permanent staff members.
NRA deputy chief executive Lindsay Carroll said that this situation had the potential to “financially cripple” many small businesses.
“This is particularly true of some areas of the retail sector, such as fast food, which rely heavily on casual workers in periods of high customer demand,” Carroll said.
In December 2018, Federal Minister for Jobs and Industrial Relations Kelly O’Dwyer intervened, unveiling a new regulation which would stop employers having to pay casual employees twice in the vein of the WorkPac case.
The ACTU expressed its dissatisfaction with the decision, as it perpetuates the continued casualisation of the employee, with those deemed casual – but who know their roster months in advance – getting “ripped off”.
“The courts have made it clear [workers] cannot be casuals just because their employer chooses to call them casuals,” McManus said.
“Workers who are in truth permanent employees should receive their proper entitlements from the outset.”
What will the redefinition mean?
Labor’s proposed redefinition of casual employment, then, can be seen as an effort to objectively express what can and cannot be claimed as a casual employee, and what can and cannot be claimed as a permanent employee.
The Shadow Minister for Employment and Workplace Relations, Brendan O’Connor, told IRW that casual employment should be a pathway to a permanent job, but for many it has become a way of life.
“We want people people in this country to be able to plan for the long term,” O’Connor said.
As part of this movement, Labor senator Doug Cameron proposed that casual employees should be able to claim holiday and sick pay – despite the fact that these allowances are accounted for in the higher pay rate.
Australian Retailers Association executive director Russell Zimmerman believes this would once again allow casual employees to “double dip” – the exact scenario the government stepped in to prevent last year.
Zimmerman contends that while many people employed as casual workers want the flexibility of being able to turn down shifts and take leave whenever they want, he understands the need for greater job security.
“I understand people working casually may want to work part time to be able to get a loan from a bank, to be able to say, ‘I’m earning $550 a week’,” he tells IRW.
To give casual employees greater job security, without penalising small retailers – who Zimmerman says will be most impacted by efforts to reduce casual employment – he suggests allowing businesses to give part-time employees the option of working more hours without needing to pay overtime rates.
“When you look at most enterprise bargaining agreements, they allow you to flex up part-timers. You can ring them up and say, ‘Are you available?’, and you don’t have to pay overtime. You couldn’t flex them down, and they could say no, and I think that would solve the problem,” he says.
Zimmerman concedes, however, that the situation is incredibly complex and needs to be simplified one way or another, noting that if Super Retail Group can make a mistake in payment, imagine how easy it is for smaller retailers.
Joyce Abaño and Heather McIlvaine contributed reporting.