Victoria’s sick pay guarantee for casuals leaves businesses bewildered

Casuals are a valued part of the retail workforce – allowing employers to rapidly adjust staffing levels depending on the demands of the business while workers enjoy higher rates of pay, allowing them to take shifts that suit their personal circumstances. Most Australians get their first taste of employment as a casual, and it’s how many of today’s retail industry executives started their working lives.

While the aim for many retailers is to reduce their reliance on casuals due to the higher cost, they remain important to manage the peaks and troughs of customer traffic and have been the default for businesses challenged by the complexity of our industrial relations system. Christmas is a good example for retailers when they need quick access to temporary staff to support them through the busy holiday season and when there is a strong availability of students willing to work. Most discretionary retailers make up to two thirds of their profit during this time, so they must resource themselves appropriately often providing additional income for those that want it.?

Casuals already receive a loading paid by employers to cover sick leave and holiday pay, which makes the Victorian Government’s announcement around a sick pay guarantee this week confusing. The two-year pilot program will see the government fund sick days for casual workers, and whilst this is well intentioned, it poses more questions than it answers. The absence of details makes it difficult to understand how this scheme will be deemed successful.?

A key issue is how this scheme is funded beyond the two-year pilot. A levy on business has been alluded to, which would only serve as a handbrake on job creation and hamper Victoria’s recovery efforts. Business has already absorbed many layers of new cost-pressures and with so much global economic uncertainty - rising inflation, surging fuel prices and supply chain cost increases – the last thing employers need is a looming new tax. All of which, Victorians will share the brunt of in the way of increased consumer prices.?

The Victorian Government’s scheme risks incentivising casual employment, which undermines industry and government efforts towards onboarding casuals as permanent. There are risks that come with casual work, and that was highlighted during the pandemic. Casuals accounted for around two-thirds of the people who lost jobs during the first national lockdown in 2020. When businesses had to close their physical stores, the casual workers – unsurprisingly - were the first to go.?

Many retailers go to the effort of encouraging casual workers to make the transition to permanent employment, but this all comes down to personal choice. Some people enjoy the flexibility that comes with being a casual - the increased pay, the ability to work multiple diverse jobs and the choice of shifts that work for them, which is particularly important for students and primary care givers. These benefits come in lieu of additional sick leave entitlements, which is mutually acknowledged from staff and employers. There is no doubt that there are both risks and rewards of being a casual employee.?

Businesses pay their casuals an additional 25 per cent premium in lieu of sick and annual leave, and the current arrangements work. So why is the Victorian Government going down this path? This is a scheme that is trying to solve a problem that does not exist, particularly as pandemic impacts subside.?

Improved industry consultation by the Victorian government has been high on the agenda through the pandemic. Genuine industry engagement is critical to evaluating this scheme which unfortunately could create more problems than it solves.

An edited version of this article was originally published in the Herald Sun on Friday 18th March, 2022.

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