How Temporary are Australia\'s Casual Jobs?

[Published in: Work, Employment and Society 15(4), December 2001, pp. 875883. http://dx.doi.org/10.1177/095001701400438251]

HOW TEMPORARY ARE AUSTRALIA’S CASUAL JOBS?

Mark Wooden

Biographical Note: Mark Wooden is Professorial Fellow, Melbourne Institute of Applied Economic and Social Research, University of Melbourne.

Acknowledgement: The author thanks Andrew Stewart for helpful comments. The usual disclaimers, of course, apply.

Address for Correspondence: Professor Mark Wooden Melbourne Institute of Applied Economic and Social Research 7th Floor, Economics and Commerce Bldg University of Melbourne, Victoria 3010, AUSTRALIA.

Word count: 3823 (including endnotes)

HOW TEMPORARY ARE AUSTRALIA’S CASUAL JOBS?

Many in Australia are concerned with the apparent trend towards the increased casualisation of the Australian workforce. In a recent paper published in this journal, for example, Campbell and Burgess (2001) reported on survey-based figures on the extent of casualisation collected by the Australian Bureau of Statistics (ABS), Australia’s central data collection agency. These data indicate that persons employed on a casual basis represented 26.9 per cent of the workforce in 1998, double the level 16 years earlier. 1

Like others before them (e.g., OECD 1996: 8; ACIRRT 1999: 140), they also juxtapose the level of casual employment against the levels of temporary employment experienced in European countries, arguing that while the two are not directly equivalent they can still be ‘usefully compared’ (Campbell and Burgess 2001). If so, then it follows that compared with European workers, far many more Australian employees are to be found working in short-term, temporary jobs. As already noted, casual employees are estimated to represent somewhere between 26 and 27 per cent of all Australian employees. In contrast, the share of employment accounted for by temporary jobs averaged just 12 per cent across the European Union member countries in 1997 (European Commission 1998: 149). Furthermore, Campbell and Burgess suggest that this simple comparison will actually understate the difference

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between Australia and Europe given the ABS definition excludes some types of workers working in jobs that would usually be defined as being temporary.

In this article it is argued that such comparisons are inappropriate and misleading. The concept of temporary employment that appears in publications of the European Communities is based on the distinction between employment contracts of fixed duration and those that are of indefinite duration. In contrast, there is nothing in either the definition used by the ABS or in the way casual employment is defined in awards to suggest that persons hired on a casual basis in Australia are also necessarily hired for a fixed duration. Indeed, recent survey evidence suggests that the incidence of fixed-term contract employment puts Australia closer to the bottom of international comparisons rather than at the top.

The Treatment and Definition of Casual Employment in Awards

By international standards, the institutional arrangements that circumscribe and regulate industrial relations practice in Australia are peculiar. Not least, employment conditions for the vast majority of Australian employees have, until recently, been heavily dependent on highly prescriptive multi-employer awards administered by the various systems of industrial tribunals that exist at both the federal and State levels. 2 While these arbitrated settlements have assumed far less significance with the emergence and growth of enterprise and workplace bargaining during the 1990s (see Hawke and Wooden 1998), they nevertheless continue to provide what the

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Commonwealth Government has described as ‘fair minimum safety net standards’ (Reith 1999: 11). Under the federal Workplace Relations Act 1996, for example, the Australian Industrial Relations Commission, Australia’s most prominent industrial tribunal, can only make awards in respect of 20 allowable matters (see Birmingham 1997). This includes ordinary hours of work and the times during which those hours may be worked, minimum rates of pay for different classifications of workers, and entitlements with respect to annual leave (i.e., paid holiday leave), sick leave and other forms of leave.

Awards also continue to govern the different types of employment relationships that employers and employees may enter into, and typically most awards provide for a category of employment known as casual employment. Moreover, while the term casual employment is sometimes used in the European context, the concept of casual employment that exists in Australia is quite distinctive. That said, in most awards (and agreements), casual employment is poorly defined. Indeed, as is widely recognised (Romeyn 1992; Campbell 1996: 573; Creighton and Stewart 2000: 214), a casual employee is frequently defined as simply anyone “engaged and paid as such”. Examples of other definitions of casual employment are reported in the federal Government’s submission on the recent application by the Australian Metal Workers’ Union to vary the casual employment provisions in the metals industry award. These include:

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•

‘A casual employee is an employee who is ready, willing and available to work the number of hours required by an employer’;

•

‘A casual employee is to be employed by the hour’;

•

‘An employer may engage employees on a casual basis in which case employment may be terminated by an hour’s notice given either by the employer or the employee, or by the payment or forfeiture of an hour’s wage as the case may be’;

•

‘A casual employee is one engaged and paid as such and whose engagement may be terminated at any time.’ (Commonwealth Government 2000: 32-33).

The legal definition of casual employment is thus highly variable across award jurisdictions. There is, however, nothing in these provisions that indicate that persons hired on a casual basis are also by necessity hired on a temporary basis (i.e., on a fixed-term contract).

Where casual employees do differ from non-casual employees is with respect to their entitlement to the usual array of job-related benefits. For example, in an audit of 50 different key industrial awards, the Commonwealth Government (2000: 33) found that 47 provided for casual employment, and in virtually all of these cases casual employees were excluded from annual leave, public holidays and sick leave. Moreover, all but two of these awards provided an additional pay loading, typically

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about 20 per cent, to ostensibly compensate casual employees for the loss of these benefits.

It thus should not be surprising that it is this feature of casual employment that the ABS uses to define casual employment in its various household surveys. That is, and as outlined by Campbell and Burgess (2001), the ABS defines casual employees as employees who are not entitled to either paid holiday leave or paid sick leave. In other words, the casual employment share that is measured each August by the ABS is actually a measure of the proportion of the workforce without basic leave entitlements. It is not a measure of the proportion of the workforce hired on a temporary basis.

Estimates of the Extent of Fixed-term Employment in Australia

As noted above, the estimates of temporary employment reported by Eurostat for European Union countries are based on survey estimates of the number of employees who are on fixed-term employment contracts. More specifically, estimates based on European Labour Force Survey data use the following definition:

A job may be regarded as temporary if it is understood by both employer and the employee that the termination of the job is determined by objective conditions such as reaching a certain date, completion of an assignment or return of another employee who has been temporarily replaced. (Eurostat 1996: 45)

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Sensible comparisons thus require obtaining estimates of the same concept for Australia. 3 There are at least two sources of such estimates – the 1995 Australian Workplace Industrial Relations Survey (AWIRS) and a special household survey conducted by the ABS in conjunction with its August 1998 Labour Force Survey. 4

The 1995 AWIRS

Modelled in part on the earlier Workplace Industrial Relations Surveys conducted in the UK in 1980, 1984 and 1990 (and, more recently, in 1998), Australia has conducted two large workplace-based surveys focused on industrial relations structures, processes and outcomes. The first was conducted in 1989-90 and the most recent in 1995, and in both instances the main samples involved approximately 2000 workplaces with a least 20 employees (see Morehead et al. 1997). Unlike the 1989-90 survey, however, the 1995 survey also included an employee component. This employee survey was administered at 1896 of the 2001 workplaces participating in the main sample. The aim was to approximate a self-weighting sample with the probability of selection for each employee being one in 100. In total, 30,005 questionnaires were distributed, with 19,023 returned in a usable form.

As part of this survey, respondents were asked to indicate whether they were employed on a fixed-term contract, defined as a contract that ends on a particular date. The weighted results indicate that 8.8 per cent of all employees in workplaces with 20 or more employees were employed on fixed-term contracts in 1995. By

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comparison, the ABS measured the casual employment share at the same time as being 24 per cent.

Such findings imply either that casual employment and fixed-term contract employment are quite different or that there are serious differences in survey methodologies. The AWIRS data suggest that the first explanation is most salient, with just 9 per cent of fixed-term contract workers apparently also hired on a casual basis (defined as usual by the absence of leave entitlements). That is, the majority of fixed-term contract workers enjoy the same leave entitlements as most non-casual employees (what the ABS misleadingly describes as ‘permanent employees’).

It is true, however, that the AWIRS sample excludes a relatively large number of employees – in particular, all employees at small workplaces are out of scope. Indeed, the total number of employees covered by the AWIRS main sample represented only a little more than half the total number of employees in Australia at the time. This thus gives rise to the possibility that the AWIRS data provide a biased estimate of the total level of fixed-term contract employment in the workforce.

The ABS ‘Forms of Employment’ Survey

Less susceptible to the charge of bias as a result of incomplete coverage are results from a recently released ABS survey into different employment arrangements. Titled the Forms of Employment Survey, this survey was conducted in conjunction with the

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August 1998 round of the regular monthly labour force survey. As such, the survey is representative of almost all persons over 15 years of age in the Australian population. 5

The Forms of Employment Survey was ‘developed to examine the nature of working arrangements that are not effectively measured by existing classifications and definitions’ (ABS 2000: 3). Included here are self-employed contractors, persons paid by an employment agency, and workers on fixed-term contracts. Consistent with the Eurostat definition, a fixed-term contract was defined in this survey as ‘a contract of employment which has a specified termination date or event’ (ABS 2000: 45). Note that the data are collected with respect to an individual’s main job. The data thus provide a count of persons and not a count of jobs.

These data suggest that the AWIRS data actually overstate the significance of fixedterm contract employment. As reported in Table 1, just 268,300 persons, or 4 per cent of all employees (excluding owner managers), were measured as employed on a fixed-term contract basis. 6 Again only a minority of these employees are also defined as being casual workers, though the proportion – 30 per cent – is considerably larger than the estimate obtained from the AWIRS data.

[INSERT TABLE 1 ABOUT HERE]

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The data presented in Table 1, however, do suggest that estimates of fixed-term contract employment understate the number of persons in jobs that are generally understood to be temporary. Specifically, some 60,000 employees were estimated not to be on fixed-term contracts yet also indicated that they did not expect to be with their current employer in 12 months time because their job was seasonal or temporary. The size of this group, however, is relatively small and hence has only a small effect on the estimated share of employment accounted for by temporary jobs – now rising to 4.9 per cent.

Such estimates put Australia towards the bottom of international estimates of the extent of temporary employment. Indeed, of the European countries listed in Table 1 of Campbell and Burgess (2001), only Luxembourg is measured as having a smaller temporary employment share.

The main objective of this article, however, is not to argue that temporary employment is relatively rare in Australia, but to demonstrate that the casual employment concept as enshrined in awards provides no useful guide to its extent. Further evidence for this claim is provided in Table 2 which summarises differences in selected characteristics of casual employees and employees on fixed-term contracts.

Compared with casual employees, fixed-term contract workers are relatively more likely to be men and in the prime-age years of between 25 and 44. Fixed-term

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contract workers are overwhelmingly working full-time hours; the reverse is true of casual employees. Fixed-term contract workers are also heavily concentrated in skilled occupations, and especially the professions. Indeed, almost 55 per cent of fixed-term contract workers are professionals or associate professionals. In contrast, casual employees are highly concentrated in those occupation categories where skill requirements are relatively minimal. Forty-three per cent, for example, are employed either in labourer or elementary clerical, sales and service jobs.

[INSERT TABLE 2 ABOUT HERE]

Perhaps even more striking are the numbers reported in Table 3. This table presents data on current job duration among casual employees. These data indicate that well over half (56 per cent) of all casual employees have been working with their current employer for longer than one year, and a sizeable minority (12 per cent) have been with their current employer for six years or more. Moreover, the majority (67 per cent) of those casual employees who have only been with their current employer for less than one year expect to be still working for that employer in a years time. Such figures suggest that characterising casual employment as overwhelmingly involving short-term, temporary employment is clearly inaccurate.

[INSERT TABLE 3 ABOUT HERE]

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Of course, if casual employment is not intrinsically temporary, what is it that makes this type of employment so attractive to employers? It certainly cannot be the overwhelming tendency for casual jobs to be also part-time – casual employment conditions are not a prerequisite for part-time employment. One answer may be in some of the other characteristics typically associated with casual employment, such as the ability to vary working hours. Somewhat differently, the answer may lie in the flexibility that casual employment potentially offers to firms, both in terms of being able to vary working hours quickly or severing employment relationships at short notice. Thus, just because a firm does not use the flexibility that casual employment potentially affords, does not mean it does not value it.

Conclusion

Campbell and Burgess (2001) concluded that while casual employment was ‘not a direct equivalent to temporary employment’ it could still ‘be usefully compared with temporary employment’. In contrast, the conclusion reached here is that such comparisons are of little value; indeed, they are extremely misleading. The distinction between casual and non-casual employees is largely about differences in employment benefits and entitlements. Casual employees are rarely distinguished from other employees on the basis of differences in the duration of employment contracts that are specified at the time of hiring. Indeed, some writers have begun making the distinction between so-called “true casuals”, by which they mean persons hired to

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work on an irregular and temporary basis, and “permanent casuals” (see, for example, Creighton and Stewart 2000: 214-215).

It also needs to be emphasised that just because the majority of casual jobs are not of fixed-term duration does not mean those jobs are not relatively insecure. While many, including Campbell and Burgess, are guilty of overstating the levels of insecurity of tenure associated with casual employment, comparative analyses of both average job tenure and perceived job security still find differences between casual and noncasuals, at least once other worker characteristics are held constant (e.g., VandenHeuvel and Wooden 2000). It does not follow, however, that prohibiting casual employment would necessarily enhance job security and tenure of the former casual employees. Introducing legislation that required employers to provide paid leave entitlements to all employees, for example, would have no obvious effect on either average job tenure or the incidence of fixed-term contract jobs.

Potentially of greater significance would be to require employers to treat all employees the same with respect to dismissal. In many cases, failure to re-engage a casual does not constitute dismissal and hence employers are not required to give advance notice of termination or to demonstrate just cause. Even here, however, it is not obvious that the effects of such a change would be very large. First, casuals who have been engaged on a regular basis over an extended period (and such persons represent a large proportion of casual employees) are often deemed by tribunals to have the same rights with respect to these matters as non-casual employees. Second,

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it is doubtful whether the main source of job instability experienced by casual employees is their employment status. Of larger importance is likely to be a relative lack of skills. As noted earlier, casual employees are overwhelmingly concentrated in the least skilled jobs and occupations. Simply changing the status of these workers from casual to non-casual will not change this.

Finally, it needs to be recognised that the availability of casual employment options within the regulatory framework in Australia is almost certainly the most important explanation for the relative lack of use made by employers of fixed-term contract employment. Employers in Australia do not need to resort to close-ended employment contracts to fulfil their need for labour flexibility; this function is fulfilled by casual employment. Thus, if casual employment were prohibited we could expect the incidence of fixed-term contract employment to rise.

References

Australian Bureau of Statistics [ABS] (2000), Forms of Employment, Australia, August 1998 (cat. no. 6359.0), Canberra: Australian Bureau of Statistics.

Australian Centre for Industrial Relations Research and Training [ACIRRT] (1999), Australia at Work: Just Managing? Sydney: Prentice-Hall.

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Birmingham, A. (1997), ‘A Guide to the Workplace Relations Act 1996’, Australian Bulletin of Labour, 23, 1, 33-47.

Campbell, I. (1996), ‘Casual Employment, Labour Regulation and Australian Trade Unions’, Journal of Industrial Relations, 38, 4, 571-599.

Campbell, I. and Burgess, J. (2001), ‘Casual Employment in Australia and Temporary Employment in Europe: Developing a Cross-National Comparison’, Work, Employment and Society, 15, 1, forthcoming.

Commonwealth Government (2000), Outline of Submissions regarding the AMWU’s Application to Vary Entitlements and Conditions for Casual and Part-time Workers under the Metal, Engineering and Associated Industries Award 1998, Canberra: Commonwealth Department of Employment Workplace Relations and Small Business.

Creighton, B. and Stewart, A. (2000), Labour Law: An Introduction, Sydney: The Federation Press.

European Commission (1998), Employment in Europe 1998, Luxembourg: Office for Official Publications of the European Communities.

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Eurostat (1996), Labour Force Survey: Methods and Definition, Luxembourg: Statistical Office of the European Communities.

Hawke, A. and Wooden, M. (1998), ‘The Changing Face of Australian Industrial Relations: A Survey’, The Economic Record, 74, 224, 74-88.

Morehead, A., Steele, M., Alexander, M., Stephen, K. and Duffin, L. (1997), Changes at Work: The 1995 Australian Workplace Industrial Relations Survey, South Melbourne: Addison Wesley Longman.

OECD (1996), Employment Outlook, July 1996, Paris: OECD.

Reith, P. (1999), The Continuing Reform of Workplace Relations: Implementation of More Jobs, Better Pay, Ministerial Implementation Discussion Paper, Minister for Employment, Workplace Relations and Small Business, Parliament House, Canberra.

Romeyn, J. (1992), Flexible Working Time: Part-time and Casual Employment (Industrial Relations Research Monograph No. 1), Canberra: Department of Industrial Relations.

VandenHeuvel,

A.

and

Wooden,

M.

(2000),

‘Diversity in

Employment

Arrangements’, in J. Mangan (ed.), Understanding and Reducing Unemployment: National and State Perspectives, Brisbane: Queensland Treasury.

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Table 1: Contract Employment Status by Casual Employment Status, Australia, August 1998 (’000s)

Contract status On a fixed-term contract Contract ends in less than 12 months but expects contract to be renewed Contract ends in less than 12 months but does not expect contract to be renewed Contract ends in 1 to 5 years Sub-total

Casual

Non-casual

Total

42.6

85.0

127.6

30.5 7.4 80.5

32.8 70.0 187.8

63.3 77.4 268.3

50.9

9.1

60.0

Not on a fixed-term contract Does not expect to be with current employer in 12 months because job is seasonal or temporary Does not expect to be with current employer in 12 months because of other reasons Expects to be with current employer in 12 months Sub-total

319.2

376.8

696.0

1335.6 1705.8

4366.0 4751.9

5701.6 6457.7

TOTAL

1786.4

4939.7

6726.1

Source: ABS, Forms of Employment, Australia, August 1998 (cat. no. 6359.0), Canberra: ABS.

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Table 2: Distribution of Fixed-term Contract and Casual Employees by Selected Characteristics, Australia, August 1998

Characteristic

Fixed-term contract workers ’000s

Sex Male Female Age group (years) 15-24 25-34 35-44 45-54 55+ Hours worked Full-time Part-time Occupation Managers & administrators Professionals Associate professionals Tradespersons Advanced clerical, sales & service workers Intermediate clerical, sales & service workers Intermediate production & transport workers Elementary clerical, sales & service workers Labourers & related workers TOTAL

%

Casual employees ’000s

%

127.2 141.1

47.4 52.6

763.2 1023.2

42.7 57.3

56.0 81.7 72.2 42.4 16.0

20.9 30.5 26.9 15.8 6.0

670.6 390.9 352.4 253.5 119.0

37.5 21.9 19.7 14.2 6.7

200.7 67.6

74.8 25.2

620.0 1166.3

34.7 65.3

11.9 119.9 27.2 22.4

4.4 44.7 10.1 8.3

16.4 184.2 83.3 135.0

0.9 10.3 4.7 7.6

10.7

4.0

56.3

3.2

47.4

17.7

370.7

20.8

7.3

2.7

173.6

9.7

10.1 11.4

3.8 4.2

422.5 344.2

23.7 19.3

268.3

100.0

1786.4

100.0

Source: ABS, Forms of Employment, Australia, August 1998 (cat. no. 6359.0), Canberra: ABS.

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Table 3: Current Tenure and Expected Tenure of Casual Employees, Australia, August 1998

Tenure with current employer or business

10 years Total

Does not expect to be with current employer or business in 12 months

Expects to be with current employer or business in 12 months

All casual employees

’000s

% of all casuals

’000s

% of all casuals

’000s

% of all casuals

259.5 114.9 45.3 13.1 10.5 443.2

14.5 6.4 2.5 0.7 0.6 24.8

521.9 381.8 244.1 114.9 80.4 1342.2

29.2 21.4 13.7 6.4 4.5 75.2

781.5 496.7 289.4 128.0 90.9 1786.4

43.7 27.8 16.2 7.2 5.1 100.0

Source: ABS, Forms of Employment, Australia, August 1998 (cat. no. 6359.0), Canberra: ABS.

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Endnotes 1

The proportion fell slightly, to 26.4 per cent, in August 1999.

2

Awards are formal documents that are made, or assented to, by industrial tribunals and set out legally enforceable terms and conditions of employment.

3

In some European countries (e.g., the UK) casual work is explicitly included in official statistics as part of temporary employment. Nevertheless, the point remains that what is described as casual work in these statistics collections bears little resemblance to the concept of casual employment enshrined in Australia’s award system.

4

In addition, estimates of the extent of fixed-term contract employment for one State – Victoria – are provided in ABS, Working Conditions, Victoria, October 1997 (cat. no. 6358.2), Melbourne: Australian Bureau of Statistics.

5

The monthly labour force survey excludes members of the permanent defence force, overseas residents and certain diplomatic personnel. In addition, all supplementary surveys also exclude most persons residing in institutions (such as boarding schools, hospitals, retirement homes and prisons). Finally, this particular survey also excluded from its coverage about 80,000 persons living in remote and sparsely settled areas of Australia.

6

The usual ABS definition of an employee includes owner managers of limited liability companies. These persons have been excluded here on the grounds that they are better treated as self-employed. Their inclusion would, of course, reduce the estimated proportion of employees on fixed-term contracts (to 3.7 per cent).

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