CASUAL WORK AND CASUALISATION: HOW DOES AUSTRALIA COMPARE?
Iain CampbellCentre for Applied Social Research
RMIT University
Report prepared for a conference ‘Work Interrupted: Casual and Insecure Employment in Australia’, Melbourne, August 2 2004
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CASUAL WORK AND CASUALISATION: HOW DOES AUSTRALIA COMPARE?
Iain Campbell
After more than ten years of academic research, we know a lot about casual work in Australia. The process of ‘casualisation’, which has seen the number of casual workers rise to more than a quarter of all employees, has spurred on several bursts of research. Using official statistics, industry or enterprise case studies, interviews, legal cases and inquiries, scholars have succeeded in building an impressive body of knowledge concerning the extent of casual work, the rate and patterns of its growth, its different features, the place of casual work in the system of labour regulation, the characteristics of casual workers, and the different patterns of participation in casual work.
This is not to say that casual work and casualisation is now uncontroversial. On the contrary, they remain hotly contested topics. Gaps in our knowledge continue to generate discussion and debate. Most important, there is continuing disagreement at the level of evaluation, especially in regard to possible policies for dealing with casual work. Is the rapid growth of casual work a problem? Many commentators say yes. Casual work is seen as associated with disadvantages, including low pay and various forms of labour insecurity. These create difficulties first of all for the workers involved, but also more broadly for their families, their communities, the enterprises themselves, and the general society. In this perspective, awareness of casualisation is a call for action, primarily through initiatives to design better labour regulation. On the other hand, others contend that casualisation is not a problem. It may be conceded that casual work is associated with disadvantages for individual workers – though it is often argued that the extent of these disadvantages is overstated – but this point of view asserts that casual work is simply the price paid for flexibility and for prosperity in a modern economy. As such, it is necessary and indeed welcome. It is argued that any disadvantages for individual workers should be tackled through the welfare system and not by intervention in the sphere of employment. Far from a need for government intervention, the main imperative is to extend employer flexibility further.
The lines of division in this evaluation and policy debate are complex. Roughly speaking, however, we can say that the debate tends to oppose trade unions on the one hand and some business groups/ federal government on the other hand. It opposes calls for better labour regulation (sometimes called ‘re-regulation’) on the one hand and calls for a continuation of the neoliberal thrust towards reduced protective regulation (sometimes called ‘labour market deregulation’) on the other hand.
This report approaches the debate from a particular angle. It adopts a cross-national perspective in order to explore the experience of casualisation in Australia. As Tiffen and Gittens (2004, 1-2; see Rubery and Grimshaw, 2003) point out, cross-national comparison can be a useful way to push forward discussion. Comparison can
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facilitate a better delineation of the individual case of Australia, test generalisations, and increase knowledge of alternative policies, differing institutional arrangements and contrasting cultural assumptions.
Cross-national comparisons are already an underlying issue in the discussion of casualisation, though only in a rather primitive form, confined to debates around official statistics. There is widespread awareness that the category of casual employment and its recent pattern of growth in Australia are unusual (eg Australian Government, 2003, 16). But there is continuing confusion about just what this means. Precisely how unusual and in what ways? What does this mean for the evaluation of casual work? What does this mean for policy? These slide into several other questions. What is happening in other OECD countries? Are there similar processes at work? Which countries are most relevant for comparisons? What can we learn from efforts to respond to labour market changes? Are we doing better or worse than other countries? How successful are other countries in designing regulation to balance needs for flexibility and for security?
This report cannot offer detailed answers to all questions. It has a more limited range. It offers an initial exploration of international comparisons, centring on the pivotal issue of the peculiarity of casualisation in Australia. It draws on data and secondary literature from just a select few countries, while neglecting many others. The first section provides a brief sketch of casual work in Australia, focussing on the features that are most salient for cross-national comparisons. It builds on the everyday understanding of ‘casual’ as waged work that lacks many of the rights and benefits associated with standard ‘permanent’ employment. The second section considers the heart of the matter. How does casual employment in Australia compare? This section follows three different approaches, of varying degrees of utility, to answering this question. It confirms that our version of casual work is unusual. Most OECD countries regard such employment as inappropriate in a modern society and therefore proscribe it, either directly or indirectly. Something parallel may survive in small amounts as day labour in some countries or as an indirect consequence result of qualifying conditions for access to rights and benefits. Something parallel may also survive, sometimes in larger amounts, in the illegal or informal sector. But, apart from the possible exception of the United States, it is hard to find anything similar to our casual employment, at the same level of prominence and the same level of official endorsement, in other OECD countries. The third section summarises the conclusions that can be drawn from this comparison. It suggests that casual employment is not only unusual but also unnecessary. Most OECD countries are clearly able to get by without it. They are able to build prosperous, dynamic economies which reconcile employer and employee needs through more acceptable forms of permanent and non-permanent employment, such as fixed-term, probationary, and good quality part-time employment. Finally, the fourth section returns to the vexed issue of regulation. It argues that there is a need to move beyond the old-fashioned 1980s debate about less or more labour regulation. The more important issue is whether labour regulation is well-designed and effective. The section concludes by briefly reviewing the experiences in other countries in regulating non-permanent forms of employment.
1. A brief sketch of casual work in Australia
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In Australia, as in most OECD countries, the twentieth century saw a slow process of accretion of rights and benefits within the standard employment relationship, starting with employment security but readily extending out to guaranteed minimum wages, standardised working-time arrangements and rights to collective representation (Bosch, 2004). As in most OECD countries, the framework of protection and minimum standards in Australia covered the vast majority of waged jobs, generally called ‘permanent’ (or ‘ongoing’ or ‘continuing) jobs. However, as in most countries, some waged jobs missed out on this development. As a result, these jobs tended to display a shortfall in rights and benefits in comparison with the standard ‘permanent’ job, and the employment structure tended to acquire a dualistic division, with permanent jobs separated from varied types of non-permanent jobs.
a) Definitions of casual
The main category in Australia that missed out on this historical development is called ‘casual’. Definitions of casual employment are often a site of confusion and controversy, marked by conflicts between vernacular, regulatory and contractual meanings (O’Donnell, 2004). The nuances of this debate are not a major concern here (see Campbell and Burgess, 2001b). It is only necessary to note that the report starts with an everyday understanding of casual, as a form of employment in which the worker is deprived of many rights and benefits, including lack of entitlement to paid annual leave, paid sick leave, paid public holidays, notice of dismissal and redundancy pay. It is a form of employment that can be regarded as largely unprotected because it misses out on many types of social protection developed for permanent employees.
Casual employment is by no means the only category of waged work that stands outside standard permanent employment in Australia (Watson et al., 2003). Labour regulation also provides for fixed-term employment, apprenticeships and traineeships. Recently, as in many countries, temporary work agencies (‘labour hire’) have begun to acquire prominence as a way of organising different forms of employment. In addition, new forms of ‘disguised wage labour’ or ‘dependent contracting’ have begun to spring up on the boundary between employee and non-employee status. Nevertheless, casual work has always been the largest of these non-permanent categories. Moreover, it has grown rapidly over the past two decades.
The substantial size of the casual workforce is clear enough from the official statistics. According to one conventional measure used by the Australian Bureau of Statistics (ABS), a ‘casual employee’ can be defined as an employee who is not entitled (in their main job) to paid annual leave and paid sick leave. ‘Casual employees’ in this sense numbered 2,239,900 persons in August 2003. They represented 27.6 percent of all employees (or around 23.6 percent of the total employed labour force).1 These 1 The data are from the regular series, Employee Earnings, Benefits and Trade Union Membership (EEBTUM), used to construct estimates of ‘casual’ and ‘permanent’ employment over time. Since 2000 the categories of ‘casual’ and ‘permanent’ have been re-labelled as ‘without leave entitlements’ and ‘with leave entitlements’. This conventional ABS measure has some problems, which are extensively canvassed in the secondary literature (Campbell and Burgess, 2001b). One major problem is to do with the underlying definition of ‘employee’, which includes owner-managers of incorporated enterprises. The presence of this group can distort the data on casual employment. Though the overall effect is not major, it is still significant. Recent ABS surveys, including the latest EEBTUM (ABS Cat. No. 6310.0, August 2003), provide some data that exclude owner-managers (see below Table 2).
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figures point to a trajectory of rapid growth, the number having risen from 850,000 persons or 15.8 percent of all employees in 1984. In the 1990s the absolute number of full-time permanent workers declined while growth in casual employment accounted for most of the net growth in employment (Borland, Gregory and Sheehan, 2001, 11-12).
Casual employment is available to employers through different channels. As well as casual employees who are hired directly, firms can draw either on ‘casual pools’ organised by the employer or on temporary agencies which supply workers to firms as need arises (Watson et al., 2003, 65). The majority of workers organised by temporary agencies are classified as ‘casuals’ and at any one point in time they account for about six to nine percent of those counted as casual employees (Campbell, Watson and Buchanan, 2004).
b) Casual work and labour regulation
Casual employment, understood as employment with few of the standard rights and benefits of permanent work, is firmly anchored in features of labour regulation. In contrast to most other labour regulation systems, the Australian system permits employees – with remarkably few controls – to be employed with only limited rights and benefits under the heading of ‘casuals’. In most awards, rights and benefits were defined for most employees along the conventional axis of full-time permanent employment, but special clauses allowed for workers to be employed under certain forms of work that were exempted from the standard provisions. The most commonly-found clause covered ‘casual’ employment. This form of work was subject to a blanket exemption that covered almost all rights and benefits (but with a casual loading on the hourly rate of pay, partly intended as compensation for the foregone benefits).
No doubt this exemption was designed to allow room for employers in certain industries to deploy labour for short-term and irregular work demands, as in a common dictionary definition of ‘casual’. However, the award definition of casual was generally much broader. Casuals are often defined in awards somewhat tautologically, as ‘casual’ because they are paid ‘as such’: form overrides practical substance as one industrial lawyer has put it (Stewart 2002: 10). Nor did the controls found in such clauses help much. Sometimes they sought to set a limit on the length of time workers could be employed under such contracts, but more often they took the simple form of quotas for casuals (number of employees or number of hours). The broad definition and the poor design of the controls left ample room for the category
Excluding owner-managers lowers the estimate for the number of casuals in August 2003 from 2,239,900 to 1,907,600. This would represent 25.4 percent of all employees or around 20.1 percent of the workforce. In some recent irregular or occasional surveys the ABS also uses a new measure of ‘self-identified casual’. Apart from minor changes, this involves two main changes in comparison with the conventional measure based on leave entitlements. First, it removes owner-managers of incorporated enterprises from the count of employees. Second, amongst the remaining group of employees without leave entitlements it distinguishes those who identify themselves as casual and those who do not. The first change is useful, but the introduction of a filter according to self-identification is hard to justify (see Campbell and Burgess, 2001b). It is true that the vast majority (88.8 percent in 2001) of employees without leave entitlements do in fact identify themselves as casual, but the fact that a small minority are removed from the figures introduces an unfortunate complication. In 2001 self-identified casuals numbered 1,811,000 (24.8 percent of all employees) (ABS 6359.0, November 2001).
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of casual to be abused, taken up by employers for a variety of purposes that stretched well beyond meeting short-term and irregular work demands.
The existence in awards (and also in statute) of this exemption constitutes a type of gap in the regulatory system. It is what can be called an ‘officially sanctioned’ gap, whereby casual work is regulated but not protected. However, it is by no means the only gap within which casual employment can be found (Campbell, 1996). The Australian system is highly porous and opaque. Two other gaps, associated with the poor coverage of labour regulation and the poor enforcement of existing rules, also provide fertile soil within which unprotected employment can survive and flourish. As a result, casual employment can be seen as a form of employment that straddles the border between the regulated and unregulated sectors. It is half in and half out of the formal sector.
c) Qualifications and caveats
I refer to casual employment as employment with few standard rights and benefits. At least three qualifications should be mentioned.
diversity of casual work
First, the fact that casual employment has few rights and benefits does not mean that it is homogenous in all or even most respects. On the contrary, the fact that casual employment has so few rights and benefits makes it a highly flexible resource that can be used by employers in a wide variety of ways. This in turn means great diversity in the way in which casual employment appears in practice. For example, around two thirds are part-time (representing approximately 60 percent of all part-time waged jobs), while the remaining one third are full-time jobs (representing approximately 13 percent of all full-time waged jobs). There is also diversity according to occupation, sector and industry. Casual work is concentrated in industries such as retail (where 44 per cent of employees were casual on a leave entitlement basis in 2003) and accommodation, cafes and restaurants industries (59 per cent), but large numbers can also be found in expanding industries such as property and business services (30 percent) and health and community services (22 percent). Moreover, casual employment has grown significantly in many industries since 1985, including manufacturing (from 8 per cent to 17 per cent), and construction (18 to 30 percent) (see Table 1).
Table 1: Casual employees a) and casual density in industry divisions, 1985-2003
Casual employees
(‘000)
Casual density(%)
2003 1985 b) 1994 2000 2003Agriculture, forestry and fishing 97.2 38 47.6 56.7 53.5Mining 10.7 2 9.3 9.2 14.6Manufacturing 173.5 8 13.3 15.0 17.1
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Electricity, gas and water 8.5 1 * *5.8 10.6Construction 148.9 18 30.2 31.1 30.4Wholesale trade 76.9 10 14.5 17.8 19.5Retail trade 553.2 33 44.0 45.2 44.2Accommodation, cafes and restaurants
247.3 50 54.4 57.4 58.9
Transport and storage 81.3 10 16.9 23.9 22.4Communication services 22.6 4 7.5 15.0 14.8Finance and insurance 35.0 4 6.8 11.7 10.8Property and business services 283.9 19 26.9 31.8 30.3Government administration and defence
33.3 8 8.4 7.7 8.2
Education 120.9 15 15.9 17.1 17.9Health and community services 188.4 18 21.2 21.8 21.9Cultural and recreation services 84.9 30 44.2 44.1 45.2Personal and other services 73.5 21 21.4 22.6 25.0
Total industries 2239.9 16 23.7 27.3 27.6(a) employees without leave entitlements in their main jobb) figures are rounded to the nearest percent.* relative standard error greater than 25 per cent.
Source: unpublished 1985 ABS data cited in Reith, 2000, 7; ABS, Trade Union Members Australia, August 1994, Cat. No. 6325.0; ABS, Employee Earnings, Benefits and Trade Union Membership, Australia, August 2000, August 2003, Cat. No. 6310.0.
Corresponding to the diversity in jobs is diversity in the social groups that take up the jobs. Casual work is often loosely identified with part-time casual work, and it is frequently seen as the special preserve of young workers who are full-time students and women seeking to balance paid work with family responsibilities. Sometimes it is suggested that such workers prefer part-time casual work and that casual work is therefore not really a problem. This view misunderstands the breadth and nature of casual work. As Table 2 indicates, a substantial part of casual employment is full-time. Less than half of all casual jobs are part-time jobs occupied by full-time students and prime-age women (not all of whom will be women with family responsibilities). It is true that many casual workers stem from these two groups. However, even in this case, it would be silly to jump to the conclusion that there is a preference for casual status. Much of the concentration is to be explained in terms of preferences for reduced hours of paid work rather than in terms of any putative preference for casual conditions. While many women seek part-time work when they are caring for dependents, there is no evidence that they desire part-time work under inferior conditions (Pocock, 2003).
Table 2: Casual employees a), Australia, August 2003 (% of all casual employees)
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Full-time casual Part-time casual
Full-time secondary school students b) * 11.6Full-time tertiary students c) .2 12.8 Total full-time students 24.4
Not full-time students, aged 15-24 7.2 9.0
Women, aged 25-54 6.2 25.1
Men, aged 25-54 12.1 7.0
Older workers, aged 55+ 2.4 6.3
Total 28.1 71.9Total (‘000 persons) (536.1) (1371.4)
a) Employees without leave entitlements in their main job; excluding owner-managers of incorporated enterprises
b) aged 15-19c) aged 15-24
Source: unpublished data from ABS, Employee Earnings, Benefits and Trade Union Membership, August 2003, cat. no. 6310.0.
Similarly, there is also diversity in the patterns of participation in casual work. Some workers may have a casual job for a brief period of time before moving on to a permanent job (either in the same occupation or, more commonly, as in the case of students, in a completely different occupation). However, others may be locked into casual work for extended periods. Workers can be trapped in either of two ways. First, they can be trapped in casual labour markets, where they cycle in and out of short-term casual jobs, spells of unemployment, spells of training, and spells out of the labour market altogether. Second, they can be trapped in the one casual job for a lengthy period of time. This second form of entrapment is linked to the fact that casual jobs in Australia are not always, as in some dictionary definitions, short-term and irregular. On the contrary, they are often long-term and regular jobs, in which workers build up lengthy periods of tenure.
This draws attention to one of the most striking aspects of the diversity within casual employment. It concerns the peculiar phenomenon of what are sometimes called ‘long-term’ (or ‘permanent’ or ‘regular’ or ‘ongoing’) casuals, often counterposed to short-term (‘irregular’ or ‘true’) casuals. These are used by employers in a long-term, regular way that is similar to the way in which permanent employees are used. This phenomenon of long-term casuals is very important, and it stands out as the main way in which casual status is abused in Australia. However, it is difficult to estimate its precise extent and pattern of growth.2 One familiar measure is in terms of 2 Murtough and Waite (2000) make an intense effort to generate an estimate of the relative weight of these two groups. They suggest that the group of ‘true casuals’ made up 11.3 percent of all employed persons (or 14.2 percent of all employees, excluding owner-managers) in 1998. The remaining 10
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accumulated tenure. This is not entirely satisfactory, but it does provide a rough indication. The tenure data show that casual workers have substantially shorter accumulated tenure than permanent workers (see Table 3). Nevertheless most casual jobs have lasted longer than one year (and, presumably, some of those with accumulated tenure of less than one year will also last for a long period before they are finally terminated). It seems likely that the majority of jobs classified as ‘casual’ in Australia are indeed ‘permanent casual’ jobs, but how big a majority is uncertain.3
Table 3: Length of time with current employer, permanent and casual employees a) by hours, November 2002 (%)
permanent CasualFull-time Part-time All casuals
Less than 1 year 16.8 38.4 40.7 39.8 Less than 6 months 8.2 25.8 26.5 26.21 and under 5 years 37.7 33.1 40.4 37.55 and under 10 years 19.5 13.2 10.5 11.610 years or more 26.0 15.3 8.3 11.1
Total (‘000 employees) 5753.1 788.3 1184.6 1972.9a Employees ‘with leave entitlements’ and ‘without leave entitlements’ in their main job, excluding school students aged 15-20 years and persons who worked solely for payment in kind.
Source: ABS, Career Experience Australia November 2002, cat. no. 6254.0.
rights and benefits
Second, the fact that casual employment has few rights and benefits does not mean that it has no rights and benefits. At least in the effectively regulated sector, casual employees will be subject to basic standards, eg for occupational health and safety, defined as applicable to all employees. Moreover, primarily as a result of policy initiatives over the past few years, some casual employees have begun to acquire rights and benefits. This is particularly the case for some ‘long-term’ casuals who are able to establish continuity of service beyond threshold periods, eg twelve months or twenty-four months. For example, many now have limited entitlements to unpaid parental leave and to protection against unfair dismissal.
the casual loading
percent or so that are normally counted as ‘casuals’ are designated as ‘ongoing casuals’. Unfortunately, the criteria used to distinguish the two groups are not convincing (Campbell and Burgess, 2001b, 94-96).3 Other indications can be derived from questions in different ABS surveys. One question in a special ABS survey in 2000 (ABS cat. no. 6361, April to June 2000) asked about the pattern of working in the main job. Some 43.4 percent of self-identified casuals stated that they did ‘casual or relief work’, but just as many stated that they worked a set number of days each week or each fortnight. A later question on regular hours found that some two thirds (66.8 percent) of self-identified casuals worked regular hours.
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Third, it is common for defenders of the Australian system to concede that casual workers may indeed have few rights and benefits. But they often go on to stress that casual workers receive a ‘casual loading’ on their hourly rate of pay, which can be seen as in effect a monetary equivalent or ‘cashing out’ of their rights and benefits. It is often concluded that this is an attractive choice for many employees, that casual employees are well-paid, and that no real disadvantages can be associated with casual employment.
It is true that the casual loading, where it is paid, does cushion the disadvantages of casual status and that it is likely to be appreciated by casual workers. However, the common claims about the significance of the casual loading are naïve and overlook several points. One fundamental issue concerns the legitimacy and effectiveness of cashing out standard rights and benefits. It may be possible to monetize benefits, but how is it possible to monetize rights? Can this be a fair exchange, given the power of employers in labour market transactions? Does the money in fact provide equivalent protection? More broadly, it is important to point out that not all casual workers receive the casual loading. Certainly those in the zone of effective regulation will receive it in some form, but both those in the sphere where award provisions are evaded as well as those outside of award regulation are unlikely to receive it. How many receive the casual loading? There are no reliable figures, but early data from ABS irregular surveys suggest that only around half of all casuals believe that they receive a loading (Campbell, 2000, 73; Campbell, 1996, 579-582). Even for those who do receive it, another question concerns whether the casual loading does in fact compensate for foregone benefits. This is partly to do with the familiar calculations of what a foregone benefit is worth, as it has been argued out in recent cases before the industrial relations tribunals. But also important is the question of the comparison point for assessing the value of the extra pay provided by the loading. The comparable permanent worker who allegedly earns less than the casual is often just a theoretical fiction, which bears little relation to practical reality. In heavily casualised occupations and workplaces, such a comparable permanent worker may be hard to find. Alternatively, the casual may receive a loading defined according to one award, but the comparable permanent worker may be in receipt of a much higher over-award or collective agreement rate or s/he may be under a different award.4 Similarly, the casual may receive a loading on the base classification but the comparable permanent worker may have proceeded much further up the salary and classification scale. Given these factors, it is no surprise that the raw data indicate that hourly wages of casuals, far from standing well above, fall well below the hourly wages of permanent workers (Watson, 2004).
d) Disadvantages of casual work
What has been said so far helps to describe the disadvantages of casual work. These start from the common lack of rights and benefits. The precise extent of the disadvantages associated with the job vary, but – in addition to the lack of almost all standard leave entitlements – they typically include low hourly rates of pay, low and irregular earnings, reduced employment security, lack of access to notice and severance pay, reduced access to unfair dismissal rights, vulnerability to changes in
4 This is a familiar practice in labour hire arrangements. Casual workers supplied through labour hire may receive a casual loading according to some award, but the worker alongside whom they are working may be paid a different and much higher rate according to a different award or agreement.
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schedules, loss of skill- and age-related pay increments, and lack of representational rights. Though some long term casuals may have formal rights to call on the termination jurisdictions, many do not, or cannot practically exercise such rights given their weak workplace power. The fact that some casual employees receive a casual loading on the hourly rate of pay may cushion some of these disadvantages, but it is unlikely to compensate for all. The disadvantages of casual status are not just related to the lack of standard rights and benefits. They extend into the more diffuse area of exposure to heightened risk in practice.
One particular feature of casual employment in Australia is the size of the shortfall in protection that casual workers experience in comparison with standard permanent workers. This shortfall is large, spanning numerous features of the employment relationship. It defines a potent cocktail of advantages for employers, if they are able to deploy casual workers in place of permanent workers. The advantages can include:
cheaper labour costs; greater ease of dismissal; ability to match labour-time to fluctuations in workload; administrative convenience; and enhanced control.
The size of the shortfall and the breadth of these advantages help to undermine the stability of the employment structure in Australia. They establish a dynamic that, given the right economic and political conditions, fuels the substitution of casual work in place of permanent work.
The disadvantages of casual status can have a severe effect on employees, especially when employees are trapped in such jobs for lengthy periods (Smith and Ewer, 1999). The disadvantages for employees can in turn affect families, communities, and the larger society as insecurity and other effects spill beyond the individual worker (Pocock, 2003). The problems caused by casual employment are most severe for ‘long-term’ casual employees. It is in this case that the disadvantages of casual employment threaten to have the most powerful long-term effect on employees. At the same time, this is the form of casual employment that is most clearly an abuse of the category of ‘casual’. Its use by employers cannot be related to any compelling need for labour to meet short-term, irregular needs. Instead it is most frequently used as a simple equivalent to standard ‘permanent’ employment. In effect, casual status is being used – or more correctly abused – in order to evade the rights and benefits associated with standard employment.
2. How does casual employment compare?
In pursuing a cross-national perspective on casual work three approaches can be used. We can look in other countries for categories of employment called ‘casual’. Or we can link up with the international discussion of ‘temporary’ work. Or we can look for a substantive equivalent to casual work, irrespective of the label.
a) Looking for ‘casual’
The first approach involves looking for forms of employment called ‘casual’ in other countries. This is the least successful and least useful approach. A category of
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‘casual’ is hard to find in most OECD countries. It sometimes appears in European data and discussion as a minor sub-category of temporary employment, but it is generally a tiny phenomenon that barely registers in the statistics and in the discussion (Meulders, Plasman and Plasman, 1994; Delsen, 1995). In their review of EU data, Meulders, Plasman and Plasman (1994, 73) define casual employment as ‘temporary employment characterized by its irregular nature’, and they summarise the fragmentary evidence in national data sets on its incidence.
Regulation in many countries provides for day-labourers doing very short-term occasional work, such as unloading a truck or repairing a fence, to be exempt from basic requirements such as paid leave. However, these are not always called ‘casual’. A category of ‘on-call work’ is used in some countries, eg the United States, Canada, the Netherlands and Korea (OECD, 2002, 134). More recently, figures for ‘employees working on call’ have been cited for EU countries. It is explained that this means “that they have no guarantee of work for a fixed number of hours, but that they may be called into work by the employer and must report to work at short notice”. According to this report, on-call work prevails in services, particularly in the trade, transport, hotels and restaurant sector. It accounted for only 1.4 percent of all employees in the EU in 2001 (Van Bastelaer and Vaguer, 2004).
Only two countries seem to have a category of ‘casual’ that seems in any way prominent in the employment structure – the United Kingdom (UK) and New Zealand. This is not entirely surprising since these are the two countries are the closest to Australia in terms of regulatory history. However, in both cases we can see major differences that complicate any comparison.
A shared legal heritage produces several parallels between the United Kingdom and Australia. Casey (1988, 95-109) points to the similar legal definition of ‘casual’ in the United Kingdom and the exclusion of such workers from standard employment benefits. He also points out that such employment is compatible with a degree of regularity and continuing employment. Indeed the familiar Australianism of ‘regular casual’ can also be found in the UK legal discussion (eg Burchell, Deakin and Honey, 1999, 8). However, there seem to be two major differences. First is the difference in extent. Data for the United Kingdom suggest that ‘casual workers’ constituted approximately 1.5 per cent of the employed labour force through the 1990s, with the highest concentration occurring in hotels and restaurants (where the proportion of casual workers reached around 6 per cent) (Purcell and Purcell, 1997; Burchell, Deakin and Honey, 1999, 23). Another major difference stems from the fact that under UK case law, where one of the tests of employee status involves ‘mutuality of obligation’, such workers are sometimes seen as self-employed rather than as employees with a contract of employment (Burchell, Deakin and Honey, 1999).
New Zealand has a parallel industrial history to Australia, including the development of an award system and the development of award provisions for casual employment (and indeed a similar history of ‘labour market deregulation’ in the 1990s). Awards often included casual clauses that defined casuals loosely, provided for premiums and imposed controls such as restrictions on length of engagement. As a result, New Zealand has long had ‘casual employees’; it has ‘regular casuals’; and it even has a casual loading (Ferguson, 1997; see Anderson, Brosnan and Walsh, 1994, 498-499). This tradition continued after the 1991 changes. Unfortunately data on the size of the
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casual workforce are sparse, and there is little case-study research to fill the gaps in knowledge (but see Whatman, Harvey and Hill, 1999). A survey in 1995 by Brosnan and Walsh (Brosnan and Walsh, 1996; Allan et al, 2001) produced an estimate for casual employees of around five percent, but a Department of Labour survey in 1997 suggested the figure was eleven percent (Tucker, 2002, 21). The definition used in the former survey was “employees hired on a periodic basis as need arises”, and it may be that the definition used in the later survey was different. Whatever the precise extent, it is clear that casual workers represent a sizeable proportion of the workforce.
The parallel with Australia is `strong. However, it is possible to note two main differences. First, though substantial, casual work in New Zealand is not as substantial as in Australia.5 Second, and most important, the shortfall in rights and benefits suffered by casuals in New Zealand is not nearly as sharp as in Australia. The main source of the difference stems from the fact that casuals in New Zealand are explicitly included in entitlements to most forms of paid leave, which are defined in statute as applicable to all employees. One key piece of legislation was the Holidays Act 1981, but this has recently been replaced by a new Holidays Act 2003, which came into operation on April 1, 2004. This Act specifies eleven public holidays, three weeks paid annual leave (after 12 months employment) and 5 days special leave (after 6 months employment). This, and other pieces of legislation outlining a set of minimum employment standards, specifically include casual employees. They may still present problems of access for casual employees, in particular because of administrative or practical difficulties, the impact of qualifying conditions such as tenure, lack of bargaining power, lack of knowledge, and legislative boundary issues. But they dramatically narrow the shortfall in rights and benefits in comparison with permanent employees and thereby lessen the incentive for employers to substitute casual for permanent employees…
As the above discussion indicates, one reason this approach is not very useful is to do with the deceptiveness of appealing to a common label of ‘casual’. The term has different meanings in different countries. There is not yet a common definition. An official review by labour statisticians recommends a common definition of casual workers as “workers who have an explicit or implicit contract of employment which is not expected to continue for more than a short period, whose duration is to be determined by national circumstances” (ILO, 1993, xxii). In most countries, the category of ‘casual’ refers only to cases of short-term employment to meet exceptional or irregular work demands, traditionally concentrated in industries such as agriculture or construction. In other words it refers to a group of what can be called ‘short-term’ casuals. On the other hand, the Australian usage is broader, referring not only to ‘short-term’ casuals but also to an important group of ‘long-term’ casuals.
b) Linking up with the discussion of ‘temporary’
The second approach involves comparing ‘casual’ work in Australia with ‘temporary’ work in other countries. This is a familiar approach, often found in the Australian literature. It has some merits. It allows access to labour force data in other countries, which often deploy the category of ‘temporary’, and it allows access to the extensive
5 The 1995 survey was also held in Australia at the same time, using similar definitions. The results indicated that ‘casual work’ in this definition was twice as prevalent in Australia as in New Zealand (Allan et al, 2001, 257)
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secondary literature on temporary work. There are analogies and overlaps that link the two categories of ‘casual’ and ‘temporary’. However, there are also pitfalls in taking this approach, and it is necessary to be aware of the difficulties in order to draw correct conclusions from the results of any comparison.
This approach can be traced back to OECD labour market statistics, which show the extent and growth of ‘temporary’ work, based on data for ‘temporary’ workers in several countries as well as data for ‘casual’ workers in Australia (OECD, 1996, 8). These data are often cited in Australian discussions, and they are the source of claims that Australia ranks second to Spain in international comparisons. For example, in Australia at Work, ACIRRT (1999, 140) drew on these statistics to argue that the growth and extent of temporary employment in Australia
has outstripped all other OECD countries (for which comparable data are available) except for Spain… temporary employment in Australia rose from 16 to 24 per cent between 1983 and 1994. This occurred at a time when most other OECD countries were keeping their levels of temporary employment stable.
In this perspective, common pressures towards the expansion of temporary employment exist, but Australia, together with just a few other countries such as Spain, stand out by virtue of the extent to which they have succumbed to these pressures.
These statistics offer a reasonable starting point for discussion (for an updated version, focusing just on European countries, see Table 4). As Campbell and Burgess (2001a) argue, there is a reasonable degree of overlap between the category of ‘temporary’ and the category of ‘casual’. ‘Temporary’ is conventionally seen as a synonym for non-permanent waged work. In this approach, waged work is grouped into two main categories – ‘permanent’ and ‘temporary’, with the latter comprising varied forms of waged work that diverge in some way from the model of ‘permanent’ and that suffer a shortfall in entitlements in comparison with permanent employment. The precise forms of temporary employment vary from country to country, but they typically include fixed-term contracts, employment with temporary work agencies, seasonal employment, casual employment and certain types of government employment and training schemes (OECD, 1991, 46).6
Table 4: Temporary employees as a proportion of total employees in selected OECD countries, 1983, 1994, 1998 and 2002
1983 1994 1998 2002
Australia a) 15.6 23.5 26.9 27.3
6 In his book on non-standard employment, Mangan (2000, 23, see also 29) seems to take a similar position:
The term ‘temporary worker’ would seem a reasonably common and easily understood concept. The distinguishing feature of temporary workers is their lack of permanency. This lack of permanency can be explicitly acknowledged and occurs over a mutually agreed period such as within a fixed-term contract. Alternatively it can be open-ended as within some ‘casual’ employees in Australia; totally random and demand-driven as with on-call workers in the US or aruabito workers in Japan or it may mean regular but periodic working arrangements such as with seasonal workers…
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Belgium 5.4 5.1 7.8 7.6Denmark 12.5 12.0 10.1 8.9Finland b) 11.3 13.5 17.7 17.3France 3.3 11.0 13.9 14.1Germany c) 10.0 10.3 12.3 12.0Greece d) 16.2 10.3 13.0 11.3Ireland 6.1 9.4 7.7 5.3Italy 6.6 7.3 8.5 9.9Luxembourg 3.2 2.9 2.9 4.3Netherlands 5.8 10.9 12.7 14.3Portugal e) 14.4 9.4 17.4 21.8Spain f) 15.7 33.7 32.9 31.2Sweden f) 12.0 13.5 12.9 15.7United Kingdom 5.5 6.5 7.1 6.1
a) 1984, 1994, 1998 and 2002b) 1982, 1993, 1998 and 2002c) 1984, 1994, 1998 and 2002. Data for 1984 are for West Germanyd) Due to a definitional change in 1992, the data for 1994 and 1998 are not strictly comparable with
1983e) 1986, 1994, 1998 and 2002. Due to a definitional change the data for 1994 and 1998 are not
strictly comparable with 1986f) 1987, 1994 , 1998 and 2002
Source: Figures in the first two columns are from the OECD report (1996: 8). Figures in the third and fourth columns are from official labour force data for Australia (ABS Employee Earnings, Benefits and Trade Union Membership Australia, Cat. No. 6310.0) and Europe (Eurostat 1999, 2003).
This definition of ‘temporary’ clearly overlaps with the category of ‘casual’ in Australia. As noted above, ‘casual’ is the largest category of non-permanent waged work in Australia. However, it is not the only type of non-permanent work. Strictly defined, if we are to get a closer approximation to the category of ‘temporary’ it would be necessary to supplement the figures for casual work with the figures for other types of non-permanent waged work. This is what Campbell and Burgess (2001a) do in their analysis, thereby reaching an estimate for total ‘temporary’ employment in Australia of around 33 percent of all waged work. As a result, Australia is placed at the very top of OECD rankings, on a level roughly equivalent to Spain. It is possible to update the procedure of Campbell and Burgess with better data (Table 5). Adding together the categories of fixed-term (4.2 percent), self-identified casual (23.3 percent), and other (2.3 percent), we reach a figure for total temporary employment in Australia in 2000 of around 29.8 percent of all waged work.7 This is still near the top of OECD rankings, though it is now slightly below Spain.
Table 5: Selected types of employee a), as a proportion of all employees, Australia, April to June 2000 (%)
P F C O Total
7 Separate estimates from the same survey suggest that 1.4 percent of all employees fitted a definition of temporary agency workers, ie they found a job through an employment agency and were paid by that employment agency. Most would be included in this table in the categories of ‘self-identified casual’ and ‘employees without leave entitlements who did not identify as casual’.
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Full-time b) 60.5 3.5 5.4 1.3 70.7Part-time b) 9.7 .7 17.9 1.0 29.3
Total 70.2 4.2 23.3 2.3 100.0(6843.7)
a) excluding owner-managers of incorporated enterprisesb) ‘full-time job’ - 35 or more usual hours worked each week in main job; ‘part-time job’ – 1-34 usual hours worked each week in main job
Key: P – employees with leave entitlements not working on a fixed-term contract; F – employees with leave entitlements working on a fixed-term contract; C – self-identified casuals; O – employees without leave entitlements who did not identify as casual.
Source: ABS, Employment Arrangements and Superannuation, Australia, April to June 2000, cat. No. 6361.0
This comparison based on labour force data has been caught up in a debate on the definition of ‘temporary’ work, the details of which need not concern us here (see Appendix 1). In this report I start from casual work in Australia and how it compares; I am not so much concerned with fitting the Australian case into the category of ‘temporary’.
It is clear that though the comparison through temporary work has certain advantages, it is ultimately unsatisfactory. It risks misunderstanding and indeed understating the peculiarity of the Australian case. We can see some of the difficulties if we look more closely at the comparison between Spain and Australia. The rapid pace of expansion of temporary employment in Spain and its current prominence in the workforce seems to bear some similarities to the experience of casualisation in Australia. But there are several crucial points of difference.
The main form of temporary employment in Spain, as in other EU countries, is fixed-term employment. Fixed-term employees suffer a deficit or shortfall in protection in comparison to permanent employees. However, the conditions of fixed-term employees are generally carefully regulated, and the shortfall in protection tends to be confined to just one or two aspects of the employment relationship. The main difference centres on the absence of employment security as a consequence of the limited duration of the employment. Consequently, the dualistic divide between permanent and non-permanent employment is relatively narrow, and the disparity in conditions remains moderate (Schömann, Rogowski and Kruppe, 1998; Vielle and Walthery, 2003). By contrast, as noted above, the distinction between casual and permanent employment in Australia spans a range of dimensions, extending well beyond employment protection. Whereas permanent employees enjoy a range of rights and benefits, casual employees enjoy almost none. Thus the shortfall in protection suffered by casual employees is large, and the dualistic divide in the employment structure appears wide. Consequently, there are good reasons to assume that the conditions of casual employees will be more diverse and, in most circumstances, markedly more precarious. In short, irrespective of any formal parallel, the substance of the category of fixed-term employment in Spain differs in crucial ways from the substance of the category of casual employment in Australia. Casual work appears as a much more degraded form of employment.
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The difference in substance is related to a difference in dynamics. The growth of fixed-term employment in Spain, as in France and the Netherlands, was an intended outcome of regulatory changes introduced in the 1980s and 1990s, often as a concession to arguments about labour market rigidities. In general, the aim was to promote fixed-term employment as an avenue for employers to gain increased flexibility in the face of what was seen as overly strong employment protection for employees on a permanent contract of employment (Toharia and Malo, 2000; Schömann, Rogowski and Kruppe, 1998; OECD, 2002). Whatever the merits of these arguments about the need to help employers gain increased flexibility, the dynamic of growth is clearly different in the case of casual employment in Australia. The expansion of casual employment in Australia has been an unintended process, largely unrelated to any specific regulatory changes. Changes to labour regulation (‘deregulation’) in the 1990s undoubtedly widened the gaps within which casual employment has flourished, but it was not responsible for creating the gaps (Campbell and Brosnan, 1999, 360-362, 371-374; Campbell and Burgess, 2001a). Most importantly, though it is clear that casual employment has many advantages for employers in comparison with permanent employment, a gap in terms of employment protection is not the most salient one. Indeed, several studies point to the fact that employment protection for regular employees in Australia is amongst the weakest in the OECD (OECD, 1999, 54-59).
c) Looking for a substantive equivalent, irrespective of the label
The third approach involves looking for an equivalent to casual work, irrespective of its label. Here we need to look at the substance of casual work and to see what is similar in substance in other countries. This approach is more difficult than the two previous approaches. It is necessary to dig deeper and to interpret more carefully the varied forms of employment. However, it is the best approach, since it promises to get closest to a comprehensive description of the peculiarities of casual work in Australia
Casual employment is employment with very few rights and benefits. The task is to look for similar forms of employment in other OECD countries. It is quickly apparent that Australia is indeed highly unusual. We can sum this up through three steps in the argument.
i) most casual work is in effect proscribed in most countries
The central difference between Australia and other OECD countries derives from the principles laid down in labour regulation. In most other OECD countries it is not possible legally to deprive employees of so many standard rights and benefits.8
Casual work in the form we know it in Australia is regarded in most other countries as inappropriate, and it is in effect proscribed in law. The proscription is generally indirect, by virtue of legal provisions to ensure that all employees are entitled to the standard rights and benefits that casual employees so conspicuously lack. As a result, the space for casual work to exist as an official, legally-permitted form of employment is squeezed out.
8 It is for this reason that visiting labour law scholars are often startled at the legal situation of casual workers (eg Bieback, 1992).
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It is difficult to confirm this point for all countries and for all rights and benefits. But we can test relatively easily for one of the major standard entitlements - paid annual leave. In Australia casual employees, constituting around 25 percent of all employees, have no entitlement to paid annual leave. It is difficult to find any other country where this is possible to such a significant extent. In most OECD countries a minimum entitlement to paid annual leave is prescribed in statute for almost all employees (though the length can vary, and in certain cases there can be qualifying conditions). Such leave is recognized as vital in order to give employees the opportunity to recuperate from labour and to enjoy leisure opportunities with family and friends.
As already noted above, paid annual leave for all employees is characteristic of New Zealand, and it explains part of the contrast between casual work in Australia and casual work in New Zealand. The requirement is also widespread in Europe. It has long been a feature of social protection in most European countries, and it has recently been extended to all countries in the European Union (EU) as a result of the impact of the 1993 Working-time Directive. This Directive includes, amongst its more familiar provisions on maximum hours, a provision for a minimum of three weeks paid annual leave for all employees covered by the Directive (and a ban on ‘cashing out’ such leave, except where the employment is terminated – see Article 7) (EIRR, 1994). Statutory minima in individual countries are generally even more generous, and the levels of paid annual leave established in collective bargaining are more generous again. The average entitlement to paid annual leave across the EU and Norway currently stands at 26.5 days (Carley, 2004).
Until recently the United Kingdom was the single European country, in which there was no statutory requirement for all employees to be given paid annual leave. This fitted in with a traditional aversion to statutory regulation and a preference for voluntary collective bargaining as the path for establishing employment rights and benefits (Edwards et al., 1998). As a result, a significant group of employees at the bottom of the labour market were employed without an entitlement to paid annual leave (around 3.5 percent of full-time employees and around 34 percent of part-time employees – see Green, 1997: 248). These employees could be seen as analogous to casual workers in Australia. However, this limited parallel has been recently removed as a result of policy initiatives. In order to conform to the Working-Time Directive, the UK Labour government introduced legislation, the Working Time Regulations 1998, which extended paid annual leave (initially three weeks and then four weeks from November 1999) to almost all employees who passed a 13 week qualifying period (EIRR, 1998). There is widespread agreement that the provision for paid annual leave was effective, and it has been widely cited as the major benefit for employees achieved by this legislation. Acording to an early DTI evaluation of twenty organizations (Neathey and Arrowsmith, 2001, 45-47), most organizations were already providing paid holidays in excess of the new statutory minimum. However, two companies, a security company and a hospitality company, were obliged to increase their holiday entitlement, and two companies were obliged to abolish the practice of buying-out of holidays. The process of accommodation to the new requirements was seen as smooth, though there were some difficulties in dealing with the small group of ‘casual workers, in particular the ‘on-call’ or ‘zero hours’ workers. The legislation subsequently ran into one minor difficulty. The 13-week
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qualifying period was challenged in the courts, and the government was obliged to amend the legislation so that the entitlement to annual leave, including the right to compensation for any untaken leave, now begins from the first day of employment. A follow-up study to the initial DTI evaluation found several organizations that had to adjust their holiday provision to take these new rules into account (Neathey, 2003). It also found several different methods for dealing with workers who were only called in when they were needed (Neathey, 2003, 24-25).
ii) but casual work can still exist in certain forms
This is not to say that casual employment, in the sense of employment with few rights and benefits, is completely absent in other OECD countries. It may still be permitted in small amounts. As noted above, regulation in some countries may provide for exemption from paid leave for day-labourers doing short-term occasional work. More indirectly, employment with few rights and benefits may emerge as a result of the existence of qualifying conditions that limit employee access to rights and benefits. The two most important are thresholds in terms of accumulated tenure and conditions in terms of number of weekly hours (or weekly wages). Most countries are aware of the effect of such qualifying conditions in creating gaps in social protection, and the rationale for such limits are usually scrutinised carefully. Nevertheless, in some countries the impact can be large (OECD, 2002, 144-150). In the case of tenure thresholds, employees at the very beginning of their employment with one employer may appear to have only a few rights and benefits. For example, for many years protection against dismissal for employees in the United Kingdom was limited in the first two years of service with an employer (this has recently been reduced to one year).
So far we have been talking about legally permitted forms of employment without rights and benefits. But such employment can also survive, often in much larger proportions, in the form of illegal work. The size of the illegal or informal sector is difficult to estimate. But it is likely to be significant in all OECD countries and very significant in a few. For example, estimates of the size of the informal economy in Spain in the mid-1980s ranged from 22 to 30 percent of employment (Cousins, 1999, 104). Perhaps the major form of illegality in this area is the evasion by employers of legal obligations to extend rights and benefits to their employees. This is a major concern in most countries, and it has provoked several regulatory initiatives.
A related issue concerns the sharpness of the boundary between ‘employee’ and non-employee’. Employment rights and benefits are often prescribed only for employees, while the self-employed are left to fend for themselves through their capacity to negotiate commercial contracts. But this division can provide a powerful incentive for evasion through the development of forms of ‘disguised wage labour’ or ‘fake self-employment’. As a result, if care is not taken, forms of employment with few rights and benefits that are functionally equivalent to casual work can begin to flourish at the boundary between employee and non-employee status. This is also a major concern in most countries, and it has led to suggestions and initiatives such as the broadening of social protection to a new category of ‘workers’ and not just ‘employees’.
iii) what about the United States?
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The United States is sometimes cited as a country where it is possible to find a situation that is at least superficially analogous to Australia, in the sense of the existence of a large minority of jobs with few standard rights and benefits. Standard employment benefits are unevenly distributed amongst employees in the US, and many workers lack such basic entitlements as paid vacations, paid holidays, and paid sick leave (Rosenberg and Lapidus, 1999). This looks somewhat similar to the phenomenon of casual work in Australia. The parallel I strong, but some differences remain.
Lack of employment benefits are found in some sectors in the US that could be called ‘temporary’, eg in alternative work arrangements such as ‘on-call employees’ and ‘temporary help agency workers’.9 These workers are much less likely than permanent workers to have employment benefits such as health insurance coverage and eligibility for employer-provided pension plan (Contingent and Alternative Employment Arrangements, Feb. 2001). A nationally representative survey of private sector establishments from the Upjohn Institute in 1995 (Houseman, 2001) showed that the lack of benefits for these workers was decisive in making their hourly cost cheaper. This in turn was likely to be an important factor in explaining employer decisions to use such workers.
However, alternative work arrangements are not the main site of lack of benefits in the US. The two groups cited above are small, accounting for only 1.6 percent and 0.9 percent of total employment in 2001 (Contingent and Alternative Employment Arrangements, Feb. 2001). The main site concerns employees in so-called ‘traditional’ or ‘permanent’ employment, who – in sharp contrast to every other OECD country – frequently lack employment benefits. The data are patchy, but limited figures exist for entitlements to paid vacations, paid holidays and paid sick leave from an employer survey. Bureau of Labour Statistics (BLS) figures from the mid-1990s suggest that 23 percent (12 percent of full-time and 64 percent of part-time employees) of employees in the US did not receive paid vacations (Foster, 1998: 59). A recent review (Wiatrowski, 2004) suggests that there has been little change since then. A steady 23 percent of employees are not entitled to paid vacations.
The US situation undoubtedly resembles the situation in Australia. The size of the group of employees without entitlement to paid vacations is almost as large as the size of the group of casual employees in Australia. It is true that, in contrast to Australia, there is no evidence of expansion in the period since the late 1980s and the pattern of growth seems steady. Moreover, it is also important not to overlook the differences as a result of the quite different regulatory histories and the different structure of entitlements for employees. The US appears as the one major advanced capitalist society that failed to erect a solid platform of minimum labour standards for employees. As such the wages and conditions of employees in the US are structured in a continuous spectrum, at the bottom end of which there can be a startling absence of any rights and benefits (even an absence of wages!). This is different to Australia (and other OECD countries), where the problem we are considering is linked to
9 I concentrate here just on the formal sector. There is also an extensive informal sector in the US, founded on the uncertain status of the large number of immigrants, especially from countries to the south such as Mexico and Guatemala. This is important for phenomena such as the hiring sites for day labourers in the large cities (Valenzuela, 2003).
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dualism in the employment structure, marked by a fundamental division between permanent employment, which is the site of an array of rights and benefits, and the varied forms of non-permanent (‘temporary’) employment, which experience a shortfall in rights and benefits. These differences are important because they shape the effectiveness of possible policy initiative to improve conditions for workers with few rights and benefits.
3. Summary
What do these comparisons suggest? They underline what most scholars have long argued – that casual employment and casualisation in Australia are indeed highly unusual phenomena.
The above discussion helps us to define more precisely the aspects of the Australian situation that appear most unusual. Four aspects stand out.
First is the extent of the shortfall in rights and benefits experienced by casual workers in comparison with permanent workers. Like most OECD countries – though with the exception of the US – Australia has a dualistic employment structure that distinguishes permanent waged work from non-permanent waged work. But because of the conditions associated with casual status the dualistic divide appears particularly sharp in Australia.
The second point concerns the sheer size of the casual workforce. The existence of such a large group of employees, spread in all parts of the employment structure and deprived of most standard rights and benefits, would seem to pose a major threat to the stability of this employment structure.
A third aspect that stands out is the existence of ‘long-term’ casual workers. This group appears completely anomalous in cross-national comparison. Insofar as similar groups exist in other countries, they are likely to be confined to the illegal or informal sector. This group represents the main example of the abuse of the category of ‘casual’ and it is possibly the main challenge for research and policy in Australia.
The fourth point concerns the existence of the other group of ‘short-term’ casuals. Though it is possible to find parallel examples in other OECD countries, the number of such workers seems much larger in Australia than in other countries. This group also presents a challenge for research and policy.
Most OECD societies are grappling with important dilemmas concerning economic development, labour regulation and the need for diverse forms of employment to meet both employer and employee needs. But most draw the line at casual work. Beyond a very short-term duration of a few days, casual work is regarded in most other OECD countries as an inappropriate form of non-permanent waged work. It is in effect indirectly proscribed, as a result of the development of provisions for all employees to have access to standard benefits such as paid annual leave and paid sick leave. Such benefits are seen as necessary for decent human life in a prosperous modern society. Nor is there much pressure for a move away from this position. There is little evidence of any debate on opening up more opportunities for workers to be deprived of benefits such as paid annual leave or for such benefits to be ‘cashed out’. The Australian example of casual work and casualisation seems to hold few attractions
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anywhere else in the world. This does not mean that other OECD countries are suffering from chronic labour market rigidities. On the contrary, there is ample evidence in other OECD countries of high levels of success in creating dynamic and prosperous economies. Employer needs for flexibility are amply met either through permanent employment or through forms of temporary employment, such as fixed-term employment, that are judged appropriate to a modern economy and society.
These distinctive features of the Australian situation point to a strong conclusion. Not only is the Australian situation unusual, but it is also unnecessary and unwelcome. International comparisons suggest that casual work and casualisation do indeed constitute a significant labour market problem.
4. Policy initiatives
Cross-national comparisons can help in policy design. It is increasingly clear that policy initiatives to deal with the problem of casualisation are necessary in Australia. The current federal government seems stuck in a rather outdated position inherited from the 1980s. They see the issue strictly in terms of the quantity of labour regulation – less or more, a heavy or a light touch. As such they appeal – at least in principle – to a ‘hands-off’ policy, inspired by conventional neoliberal principles. In responding to concerns about casualisation, a recent official report (Australian Government, 2003, 16) declares that “the philosophy of the Australian government is to encourage all forms of employment and not create disincentives for some over others”. This ignores the crucial issue of the legitimacy of casual employment. It is a form of employment that denies employees standard rights and benefits and that is widely regarded in many countries as illegitimate. As such, a philosophy of discrimination would seem to be more appropriate as a starting point.
There is no space here for a discussion of possible policy initiatives in response to the problem of casual work and casualisation (see Pocock, Buchanan and Campbell, 2004). However, it is useful to conclude by sketching out some of the thinking in other countries around policy initiatives to deal with changing labour markets. There are of course no easy solutions that can be transferred from other countries to Australia. Each country has distinct features. Nevertheless, even if the problem is not as stark as in Australia, many OECD countries are confronting dilemmas in how to respond to the issue of employment with few rights and benefits. The dilemmas are partly to do with which regulatory path to take. But they also derive from the clash of different interests and the overlap of aims. Protection and security for individual workers must remain a central aim. The demands from employers for increased flexibility are also important. Though by no means the same, there are also new demands for employee-oriented flexibility and expanded choice.
Most OECD countries are striving to reconcile these divergent social interests. It may be that we can learn most from our trans-Tasman neighbour, New Zealand, which shares a parallel history in terms of labour regulation and forms of employment. New Zealand appears to have imposed control over a very similar phenomenon of casual employment, primarily by ensuring that casual employees share with permanent employees similar entitlements to paid leave and other rights.
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However, also illuminating is the extensive effort to rethink labour regulation in Europe. One key word that signals this effort is ‘flexicurity’ (Wilthagen and Tros, 2004). This theme has been taken up in particular in the Netherlands, where the Flexibility and Security Act of 1999 set out the principles (van Oorschot, 2004), and in Denmark, where security for employees has long been seen as the key to mobility and flexibility in labour markets (Madsen, 2003, 2004).
In wrestling with the challenges posed by the growth of precarious forms of employment, European countries are seeking to ensure that:
certain forms are encouraged and others discouraged (or indeed proscribed); quality of employment is maintained and improved; wages and conditions do not diverge too much from standard employment; employee choice is given an adequate role; there is no lasting disadvantage associated with the choice of particular forms
of employment; mobility between forms of employment is fostered; and standard employment is not crowded out.
In responding to casualisation, the first aim listed above is perhaps the most important. However, given that it would be both difficult and unwise to move immediately towards a comprehensive proscription in Australia, it is also worth examining the general principles used in regulating other forms of temporary work in other countries. This may help in developing principles of regulation that can supplement a move towards tighter limits on the misuse of the category of casual.
In general, regulation of appropriate forms of temporary employment traditionally involves three main approaches:
first, restrictions/ limits on both the extent and the method of use of these forms of employment;
second, specification of the precise difference in protection between these forms of employment and the core category of full-time permanent employment (ie specifications of what rights and benefits are shared and what are missing); and
third, prescription of compensation for workers in these forms of employment (in exchange for the disadvantages that they encounter).
In most countries, restrictions and limits – including complete bans – have been the main tool. The second approach has also been extensively used as a supplement, but the third approach has traditionally been viewed with some suspicion, as veering dangerously towards a ‘cashing out’ of rights and benefits that could puncture holes in the floor of labour standards. In short, the traditional tendency has been to impose general restrictions in order to protect permanent employment. This in turn provoked criticisms aimed at releasing restrictions in order to allow employers a greater choice of employment forms.
Protecting permanent employment remains an important aim, but newer approaches have tended to pay attention to the need to also protect temporary employees (Letourneux, 1998; OECD, 2002). As such they move away from a perspective that looks just to restrictions. Instead, they adopt a more discriminating attitude towards different forms of temporary employment. There is a widespread recognition that the advantages and disadvantages of different forms of temporary employment vary and
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that this justifies both different levels of restriction and different efforts to minimize the disadvantages of specific forms.
Summarising roughly across all countries, we could say that there has been a tendency to shift emphasis from the first to the second approach in the regulation of certain mainstream forms of temporary employment. Complete bans and proscriptions are still in place for what are seen as inappropriate forms of temporary employment, but there is a lighter touch on what are seen as appropriate forms such as fixed-term work or temporary agency work. In these cases, limits and restrictions have been reviewed and fine-tuned in order to ensure that they correspond to contemporary needs, including in particular the needs of employers to develop appropriate forms of flexibility in their operations. At the same time, the disadvantages for workers have been carefully scrutinised in order to eliminate those that are avoidable and to prevent any others from accumulating. This approach involves both trying to improve the quality of this employment and trying to ensure that individuals have plenty of opportunities to move into permanent employment.
We can illustrate this evolution by looking at fixed-term contracts, the most common form of temporary employment found in most OECD countries. No country has a complete prohibition on fixed-term employment. However, in most European countries, fixed-term employment is subject to special rules and regulations, which impose restrictions and define differences in the treatment of temporary and continuing employees. These rules cover matters such as requirement of reason, duration, renewal, conversion to a permanent contract, and compensation at the end of the fixed term (Schömann et al, 1995, 141-143; OECD, 1999, 59, 62; Delsen, 1995, 140-141, Clauwaert, 1998). Some are designed as restrictions, eg the requirement of reason, which applies in around half of the EU countries. Others function to define the rights and benefits of fixed-term employees. It is noteworthy that fixed-term employees are generally entitled to most of the rights and benefits of permanent employees, with the exception of rights around dismissal (Meulders et al, 1994, 64). In France, Portugal and Spain, they are entitled to compensation at the end of the fixed-term contract (Schömann et al, 1995, 141-143). Other provisions are more ambiguous, serving both to restrict and to protect, eg the widespread specifications of maximum number of successive contracts and the maximum duration of contracts (Schömann et al, 1995, 141-143).
Regulations on fixed-term contracts in many European countries became more comprehensive or restrictive in the 1970s (Delsen, 1995, 138). However, a select number of European countries moved during the 1980s to ease the legal restrictions on recourse to fixed-term contracts, largely in response to arguments that strong employment protection regulation for continuing employees has the effect of inhibiting employment generation and sustaining high levels of unemployment and that employers needed more recourse to forms of employment (OECD, 1994; Delsen, 1995, 138-144). Broadly speaking, it is possible to classify the twelve EU countries of the time into three groups on the basis of their experience in the 1980s (Bielenski et al, 1994; Schömann et al., 1998). First are those with strong employment protection regulations for continuing employees that introduced - or retained - a liberalised regulatory regime for specific forms of temporary employment (Spain, France, Germany, the Netherlands). Second are countries with strong employment protection for continuing employees that retained - or introduced - strong restrictions on most
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forms of temporary employment (Italy, Belgium, Luxembourg, Greece, and Portugal). Finally, there are those countries with relatively weak employment protection for continuing employees that have similarly weak restrictions on the use of temporary employment (United Kingdom, Ireland, Denmark).
In recent years, the pressure towards liberalisation has eased. In countries with high levels of fixed-term employment, such as Spain, government policy now emphasises ways of encouraging an increase in permanent contracts (Schömann and Schömann, 2003). Similarly, concern with the conditions of fixed-term employees helped to encourage the social partners at European level to conclude in March 1999 a framework agreement on fixed-term contracts – an agreement that has since acquired added force as an EU Directive (Vigneau et al. 1999). The OECD refers to a continuing trend towards liberalisation (OECD, 1999), but a more careful analysis would suggest a shift from emphasis on restrictions to emphasis on narrowing the gap between fixed-term employment and continuing employment, in order to extend protection to employees in fixed-term employment.
The Fixed-Term Directive provides a summary statement of the current consensus on fixed-term contracts in European countries. The stated purpose is to improve the quality of fixed-term contract work by ensuring the application of the principle of non-discrimination, and to establish a framework to prevent the abuse of such employment relationships through the use of successive fixed-term contracts. As such it recommends a principle of non-discrimination whereby “in respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relation unless different treatment is justified on objective grounds” (Clause 4). It also recommends measures to prevent abuse such as objective reasons justifying the renewal of such contracts or relationships; a maximum total duration of successive fixed-term contracts or relationships; a maximum number of renewals of such contracts or relationships (Clause 5). In short, it recommends narrowing the gap with continuing work and measures to target the abuse of temporary work that would turn it into a long-term relationship.
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ACKNOWLEDGMENT
This report is drawn from unfinished research. The fourth section is largely reproduced from a sub-section in a recent report by Pocock, Buchanan and Campbell (2004, 29-32).
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Appendix 1: The debate on what is ‘temporary’ employment
In reply to Campbell and Burgess’s analysis of the relation between casual work in Australia and temporary work in Europe, Wooden (2001) offers a different definition of ‘temporary’. He argues that ‘temporary’ means fixed-term employment – ‘employment contracts of fixed duration’. Therefore, he contends that in the cross-national comparison of temporary work it is only meaningful to use figures for fixed-term employment in Australia. He concludes (2001, 879) that Australia has one of the lowest levels of temporary employment in the OECD, amounting to only 4.9 percent of waged work and ranking above only Luxembourg in a comparison with EU nations.
What happens to casual employment in Wooden’s framework? In his argument, ‘casual’ employment is set aside, and it not clear where it is supposed to fit in to cross-national comparisons. If the basic distinction in waged work is between temporary and permanent employment, or, in this version, employment contracts of fixed duration and those that are of indefinite duration, Wooden’s argument would seem to require treating casual employment as a form of permanent employment. This would be extremely hard to justify. Wooden agrees with Campbell and Burgess that the institutional arrangements that regulate industrial relations practice in Australia are ‘peculiar’; indeed “the concept of casual employment that exists in Australia is quite distinctive” (2001, 876). At times, he seems to hint that the category is so peculiar it can’t be integrated into any cross-national comparison. At other times, he seems to suggest that it is possible to divide casual employment in two. He notes (2001, 881; see also Wooden, 1998, 3-4) that “some writers have begun making the distinction between so-called ‘true casuals’, by which they mean persons hired to work on an irregular and temporary basis, and ‘permanent casuals’”. In this perspective, the first group could be included as temporary, while the other group would be regarded as permanent.
Similar arguments around casual employment are advanced by other commentators in Australia. The most common approach is the last, which stresses a division between ‘true casuals’, who are seen as close to a notion of temporary, and the remainder, who are in effect assimilated with permanent employees (Murtough and Waite 2000).
The cross-national data on temporary employment are revisited in a recent OECD report (2002). The authors continue to operate with a dualistic division of waged work into ‘permanent’ and ‘temporary’ components. They suggest that “for the purposes of this chapter, temporary jobs are those forms of dependent employment which, by their nature, do not offer workers the prospect of a long-lasting employment relationship” (2002, 132). Conversely ‘permanent’ jobs are defined as those that do offer workers the prospect of a long-lasting employment relationship. It is stressed that the issue is strictly to do with the characteristics of the explicit or implicit employment contract. In order to operationalise this definition, the authors advocate a direct approach based on grouping together certain types of work arrangements that are judged to have a ‘temporary’ character for reasons independent of workers’ choices whether to remain in a job (170-171). At first glance this approach seems reasonable. However, the authors then go on to argue that in the case of Australia only fixed-term contracts can according to this definition be regarded as
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‘temporary’. They suggest that ‘casual’ jobs are ‘quasi-permanent’ and must be excluded from the temporary category. As in Wooden’s analysis, Australia now slides from the top to the bottom of the ranking for temporary employment.
This new OECD approach seems ‘especially dubious’ (O’Donnell, 2004, 18). Why are casual workers regarded as falling within the ‘permanent’ category? The reasoning is hard to follow. Casual workers clearly do not have an explicit employment contract that offers a long lasting employment relationship. But it is hard to see how it could be argued that they all have an equivalent implicit contract.10 At best, a proportion of casuals might be in this position. Certainly it seems bizarre to treat fixed-term but not casual employment as temporary, when the data indicate that fixed-term employees are closer than casual employees to permanent employees in almost all aspects of their employment. This includes their tenure. For example, the SEAS data in Table A1 show that almost half of all self-identified casuals had worked in their current job for less than a year, whereas the comparable figure for fixed-term employees was only 39.8 percent (and 16.6 percent for permanent employees). The HILDA figures (Table A2) for current job tenure are lower, but the pattern is the same. More casual employees than fixed-term employees have been in their current job for less than a year. Similarly, mean tenure for casual workers is 2.6 years but it is 4.4 years for fixed-term employees (and 7.3 years for permanent employees).
Table A1: Time worked in main job, selected types of employee a), Australia, April to June 2000 (%)
P F C All employees
Under 1 year 16.6 39.8 48.4 25.61 and under 5 years 34.5 40.3 38.0 35.65 and under 10 years 19.5 10.0 8.0 16.210 years or more 29.4 9.9 5.6 22.6
Total (‘000 employees) 4801.5 286.0 1596.4 6843.7a) excluding owner-managers of incorporated enterprises
Key: P – employees with leave entitlements not working on a fixed-term contract; F – employees with leave entitlements working on a fixed-term contract; C – self-identified casuals.
Source: ABS, Employment Arrangements and Superannuation, Australia, April to June 2000, cat. No. 6361.0
10 Murtough and Waite (2000) refer to an ‘implicit contract for ongoing employment’ as one element in their procedure for separating out ‘true casuals’. Though this sounds useful, their effort to operationalise the notion is poor. As Campbell and Burgess (2001b, 95-96) point out, the notion is ‘defined to include almost everyone’. Having an implicit contract of ongoing employment is treated as a default position, which is noted as absent only under extreme circumstances. If we follow this procedure, even much casual work that is on-call would fit the bill. Thus, a student doing bits and pieces of casual bar work at night is seen as having an implicit contract of employment if s/he stated that they planned to give up the job soon in order to concentrate on their exams!
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Chapter 1 Table A2: Current job tenure, selected types of employee a), Australia, 2001 (%)
P F C All employees
Under 1 year 15.4 31.3 43.1 23.81 and under 5 years 36.4 40.8 41.5 38.05 and under 10 years 19.6 14.8 8.5 16.410 years or more 28.7 13.2 6.8 21.8
Mean years of job tenure 7.3 4.4 2.6 5.8a) excluding owner-managers of incorporated enterprises
Key: P – permanent/ ongoing; F – fixed-term contract; C – casual.
Source: HILDA Survey Wave 1, weighted data from Wooden and Warren, 2003, 13, some percentages have been summed in order to fit aggregate categories.
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