As the world struggles to cope with the COVID-19 pandemic, workers without paid leave entitlements are clearly among the most vulnerable in the sudden economic downturn.

Many thousands have already lost their jobs, while others face the prospect of unpaid time off should they need to self-isolate or become sick, can no longer work from home or their places of work are shuttered in response to increasingly strict bans on gatherings.

But how many such workers are there in Australia?

The ACTU has repeatedly said 3.3 million Australians, or one in three workers, are “casuals, contractors, labour hire and gig workers”, a number repeated by Labor politicians such as Tanya Plibersek, Tony Burke and Linda Burney.

Others, such as Labor’s Stephen Jones and Attorney General Christian Porter, have suggested the proportion of the workforce made up of casual workers is closer to one in four.

So, which count is correct? In this fact file, RMIT ABC Fact Check takes a look at casual workers and others without paid leave — how their work is defined, how many there are, and what their entitlements include.

Defining and measuring casual employment

As Fact Check has previously pointed out, there is no formal legal definition of casual employment.

Rather, casual employment “has generally been regarded as employment in which there is an absence of entitlement to paid annual leave or sick leave”, according to a guide published by the Australian Parliamentary Library.

This is the definition used by the Australian Bureau of Statistics as its primary measure of casual employment, data for which is contained in the bureau’s annual publication Characteristics of Employment.

“An employee with paid leave entitlements has access to either paid holiday leave or paid sick leave, or both,” the ABS says.

“An employee is considered to be without leave entitlements if they identify as not having access to both paid sick leave and holiday leave, or did not know their entitlements.

“This is an objective measure that can be collected consistently.”

Along with a lack of paid leave, casual employees generally have no guaranteed hours of work, work irregular hours and can have their employment ended without notice, according to the Fair Work Ombudsman.

To compensate, casual workers receive a higher hourly rate of pay that includes a so-called casual loading, usually amounting to an additional 25%.

Casuals are also entitled to some unpaid leave, such as two days of carer’s or compassionate leave per occasion, and 5 days’ unpaid family and domestic violence leave within a 12-month period.

How many casuals are there in Australia?

According to the latest Characteristics of Employment figures from the ABS, there were 2.6 million employees in Australia without paid leave entitlements in August 2019, compared to 8.1 million employees with paid leave entitlements.

That puts the rate of casual work at 24%, in line with the proportion cited by Porter and Jones.

It’s important to note that this rate only includes employees and not all workers — self-employed Australians and the owners of businesses with employees are not included in this measure.

As a proportion of all workers in Australia — of which there are around 12.8 million — casual workers make up 20%, or one in five.

Casual employment over time

In April 2018, Fact Check found that a claim, made by then workplace and deregulation minister Craig Laundy, that the rate of casualisation of the Australian workforce had remained steady at 25% over the past 20 years, checked out.

“The lie is that the rate of insecure work in this country is lifting,” Laundy said. “It’s not. It’s completely where it was 20 years ago.”

In checking Laundy’s claim, Fact Check found that since 1997 around 24 to 25% of all employees were employed on a casual basis, according to ABS data.

The same sources of data used in checking that claim have now been updated to include 2018 and 2019, showing employees without paid leave entitlements continued to account for around 24% of all employees.

But while the rate of casualisation has remained steady for the past couple of decades, experts have previously pointed to a marked increase that occurred in the late 1980s and early 90s.

John Quiggin, from the School of Economics at the University of Queensland, said the impact of recession and weakening of unions explained the growth and eventual stabilisation of the extent of casual employment.

“In general, the period from the 1980s to the mid-1990s was one in which workers lost ground over working conditions,” he said.

“The prevalence of long working hours, unpaid overtime and casualisation all increased.

“This reflected the combined effects of two major recessions and the weakening of unions, both of which weakened workers’ bargaining power. The gradual improvement in the labour market since the mid-1990s has led to a stabilisation, but no improvement [in casualisation rates].”

Other workers without leave entitlements

It’s not just casual workers who are likely to be forced to take leave without pay as coronavirus takes hold: self-employed Australians also lack the paid-leave entitlements available to employees on part-time or full-time contracts.

A Grattan Institute blog post authored by the director of its Household Finances Program, Brendan Coates, and senior associate Matt Cowgill, put the number of self-employed Australians at 2.2 million.

Cowgill told Fact Check this number included “people whose status in employment is either owner-manager of incorporated business, or owner-manager of unincorporated business” and would generally include those working in the gig economy, such as Uber drivers.

He added that international guidelines for classifying employment had been revised in a way that would make it easier to separately identify people in the gig economy.

“These classification guidelines have not yet been adopted in Australia,” he said.

So how many workers don’t have paid leave entitlements?

The ACTU’s claim that 3.3 million Australian workers were without paid leave entitlements is likely an understatement.

Combining the estimated number of self-employed workers with those in casual employment would suggest as many as 4.8 million Australian workers, or 37% of the national workforce, did not have access to paid leave entitlements in the lead-up to the coronavirus outbreak.

The University of Melbourne’s Jeff Borland told Fact Check that combining these figures “seems like a sensible approach” and the method was “a good way to calculate the total number of workers who don’t have paid leave in their main job”.

Professor Borland, who researches labour markets in Australia, added: “There shouldn’t be any overlap as they are mutually exclusive categories in the ABS data collection for that survey.”

The figure includes labour hire workers, contractors and workers in the gig economy as referenced in claims made by the ACTU and Labor politicians such as Tanya Plibersek, and more closely aligns with claims that one in three workers have no paid leave.

Characteristics of workers without paid leave

According to a statistical snapshot published by the Parliamentary Library in 2018, casual employees are likely to be younger and work in the hospitality and retail industries.

“Young workers aged 15 to 24 years are much more likely to be contracted on a casual basis compared with people aged 25 to 64 years,” the snapshot says.

“Some industries such as hospitality and retail trade have very high concentrations of casual workers, while others such as the finance sector have much lower rates.”

The Grattan Institute blog post concurs.

“Young people are disproportionately likely to be in casual work and not have paid leave,” Coates and Cowgill say.

“But casual work is not just for young people who are putting themselves through university. More than a quarter of people in their 30s, 40s and 50s do not have paid sick leave — either because they’re casual workers or they’re self-employed.”

Coates and Cowgill found that most workers without paid leave were in industries “especially vulnerable to shutdown” such as cafes, restaurants and takeaway food services.

“Not many of the 20 industries with the largest number of workers without paid leave entitlements are likely to be able to continue as normal over a period of widespread self-isolation,” they said.

Principal researcher: Ellen McCutchan

factcheck@rmit.edu.au

Sources