Mark Monday the 26th of August as the day Casual employment died in Australia. Casual employees will lose their 25% casual loading as employers are forced to make them either unemployed or part/full time employees. It won’t suddenly happen on the day, but progressively over the coming year. The over 700 pages in the Closing Loopholes act will be a sledgehammer to casuals and small and medium businesses especially.
Almost 98% of businesses in Australia are small businesses. Comprising about 2.5 million businesses, they directly employ 5.36 million people (40% of all private sector employment) and generate $600 billion in economic activity. Considering that a staggering 46% of small family businesses didn’t make a profit in the most recent financial year, my bet is that when the new laws dawn on them and the pressure gets put on, these businesses will no longer employ all these casual employees, but have to let them go as they can’t afford the risk of back pays or ensuring fixed hours into the future.
Why am I being so dramatic in claiming the death of casual employment? Because the definition of casual employment is now so poorly defined that nobody could employ someone as a casual with any confidence. Can your business confidently meet just these two basic criteria to class employees as casual?
- An absence of a firm advance commitment to continuing and indefinite work
- Are there full or part time employees performing the same kind of work? If so, they aren’t casual.
My head spins simply trying to understand all the clauses, and the above is just two of the many criteria in the Act. But in essence, I’d defy anyone to be certain that a Casual could be anyone working longer than a day or two on tasks that the business doesn’t normally do. An example of one that may pass is a business gets a pair of hands in to help with a once off clean up. Can’t see any retail or food outlets/café’s ever meeting the casual definitions, so there goes the rung that young people tread as a means of joining the work force.
We won’t see a dramatic change occur on the 26th of August but will start to see the changes gradually over time, growing after the next Federal election when people will “dob in” employers, who will have to backdate penalties to 26/8/2024. So businesses have the choice of sacking their casuals on that date, or converting them to permanent employment on 25% lower pay but with leave entitlements instead. Failure to do so could mean that the employer will be liable for a “double dip”, that is, they will have been paying the casual loading and will still have to offer the leave arrangements – and making the change in the future may mean they have to leave the pay at the 25% higher level. Employers and employees will both lose employment flexibility that both parties crave (think students, people taking on second jobs etc).
This is the same date that the “Right to disconnect” provisions also take effect, making it difficult to contact any employees outside their normal working hours. That’s a relatively benign change for most level-headed people. Far more uncertain are the new pro-Union rights related to opening the door to Unions being able to appoint a delegate for businesses with just a single employee. The Union delegates also get rights such as compulsory consultation on roster changes as well as attendance at performance management and disciplinary processes. Taken to the next step, Unions can share information with delegates in rival enterprises in the hope of obtaining Industry awards which force the most expensive provisions (and least productive arrangements) on all employers within an Industry. This isn’t wolf whistling, as this has already happened in Construction (through CFMEU BPIC’s requirements spreading to other employers) as well as only last week the forced pay rises of 15% in aged care on the proviso that the employer couldn’t increase their charge rates by more than 4.4%. Whilst the pay rise is subsidised by tax payers ($3.6 billion for year 1, thank you very much!), increasing costs by more than your revenue is still a sure fire way to go broke.
Small business is not for the faint hearted nor lazy. It’s not just employment laws that are choking businesses like a Boa constrictor. Under the guise of supply chain auditing, large corporates and Governments are now forcing small businesses to compile the same level of environmental documents and other compliance obligations as applies to large corporates. Armies of bureaucrats keep adding more regulatory tasks that owners often have to perform late at night, unpaid. Three quarters of self-employed business owners earn less than the average total weekly full time wage.
Something’s gotta give. Expect last years record insolvencies to be smashed this year.
Words from the wise
“The operation was a success, but the patient died.” – Unknown source
“Be like a postage stamp. Stick to a thing until you get there.” – Josh Billings
“Things work out best for those who make the best of how things work out.” – John Wooden
As always, Onwards and Upwards!
Fred Carlsson
General Manager
