Minister for Small and Family Business, the Workplace and Deregulation, Craig Laundy, says that the rate of casuals in the Australian workforce has been steady at 25 per cent over the past 20 years. (ABC News: Nicholas Haggarty)
An argument has erupted over the rate of casual employment in the Australian workforce with unions claiming it is on the rise, and Workplace and Deregulation Minister Craig Laundy dismissing this as a lie.
Launching the union movement’s Change the Rules campaign for industrial relations reform on March 21, 2018, ACTU secretary Sally McManus said casual work had increased.
The same day, she told ABC radio: “We’ve got a real crisis in insecure work in our country.”
About 25 years ago, “it wasn’t normal to have the amount of insecure work that we currently have,” she said.
Ms McManus immediately came under fire from Mr Laundy, who said the ACTU’s campaign was based on lies.
“With the last 20 years, the rate of casuals has been steady at 25 per cent,” he said in a radio interview.
He added: “The lie is that the rate of insecure work in this country is lifting. It’s not. It’s completely where it was 20 years ago.”
Has the rate of casualisation remained steady at 25 per cent over the last 20 years? RMIT ABC Fact Check takes a close look at the numbers.
Mr Laundy’s claim checks out, although it relies on a narrow definition of insecure work.
Over the past 20 years (to 2017), the rate of casualisation has remained within a narrow band, hovering around 24 or 25 per cent of all employees, according to data from the Australian Bureau of Statistics.
Fact Check notes that the terms “casual employment” and “insecure work” are used interchangeably by Mr Laundy, while the ACTU considers casual work to be a sub-set of insecure work.
As one expert told Fact Check, the debate over the rate of casualisation is “beset by loose language” and, therefore, open to interpretation.
What is the definition of casual work?
There is no formal legal definition of casual employment, nor is there a definition that is specific to awards and agreements.
Casual employment has generally been regarded as employment in which there is no entitlement to paid leave such as annual leave, sick leave or carer’s leave.
In Australia, the hourly pay of casual workers is bolstered by a “casual loading” to compensate for the lack of such leave entitlements — usually amounting to an additional 25 per cent.
For the purposes of data collection, the Australian Bureau of Statistics distinguishes between employees with paid leave entitlements and those without.
Casual employment is a prominent feature of labour markets in developing countries, and has grown in importance in industrialised countries, according to the International Labour Organisation.
A 2016 report by the organisation noted that nearly two-thirds of wage employment in Bangladesh and India is casual; in Mali and Zimbabwe, one in three employees is casual. By way of comparison, one in four employees is a casual worker in Australia.
Casual employment in Australia over the past 20 years
Due to differences in the definitions used for various ABS collections, pulling together a long time series of data relating to casual employees is challenging.
However, Fact Check used ABS labour statistics to compile a time series to reveal the rate of casual employment. The statistics, which go back to 1992, were drawn from a number of different ABS publications and were verified by Professor Mark Wooden, of the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne.
The publications used were Australian Labour Market Statistics (1992 to 2007), Employee Earnings, Benefits and Trade Union Membership (2008 to 2013) and Characteristics of Employment (2014 to 2017).
Figures were taken for August of each year (the month when the earliest series began).
The data shows that in 1997, 24.2 per cent of employees were casual workers; in 2017, it was 25.1 per cent.
Over that 20 year period, the rate of casualisation hit a high of 25.7 per cent in 2004 and a low of 23.7 per cent (2012).
These numbers do not include a group of workers referred to as “owner managers” — company owners who pay themselves a salary but do not take paid leave such as sick leave and annual leave.
A quick overview of casual employment over the past 35 years
While the rate of casual employment may have remained steady (around 25 per cent) over the past 20 years, it’s a different picture when looking back over 35 years.
The fastest growth in casual employees occurred between the early 1980s and the mid-1990s, although the numbers relating to that period are inflated by the inclusion of “owner managers”.
A January 2018 statistical snapshot of casual employees by Geoff Gilfillan of the Parliamentary Library, draws on ABS data from a number of sources to show that the number of casual employees grew by 89 per cent from May 1982 to August 1989, while the number of employees with leave entitlements grew by 16 per cent.
In 1982, casual employees accounted for 13 per cent of all Australian employees, according to the snapshot.
But by 1992, this share had grown to 22 per cent.
An ABS data series showing employees with and without leave entitlements, but excluding “owner managers”, is available from 1992 onwards.
As the chart above shows, there was a relatively steep rise in the rate of casualisation between 1992 and 1997 — from 21 per cent to 24 per cent.
A possible explanation, according to the statistical snapshot, is that employers looked to hire workers who could be shed quickly in the tentative economic recovery that followed the sharp recession of the early 1990s.
Since 1997, however, the rate of casual employment has been relatively stable, rising only very marginally — from 24 per cent to 25 per cent. This is the time period to which Mr Laundy is referring when he says casualisation has remained steady.
Professor John Quiggin, of the University of Queensland, told Fact Check the impact of recessions and the weakening of unions explained the growth and eventual stabilisation of the rate 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.”
How does the union movement argue its case?
In a statement provided to Fact Check, the ACTU pointed to the rise in the rate of casualisation from 13 per cent in 1982 to 25 per cent in 2017 as evidence of greater insecurity within the Australian workforce.
But it emphasised that casual employment was just one component of insecure work, whereas Mr Laundy has used the terms interchangeably.
In an address to the National Press Club on March 21 coinciding with the launch of the ACTU campaign for workplace reform, Ms McManus said insecure work also applied to so-called “gig economy” workers and Uber workers — the numbers of which were on the rise.
Underscoring the ACTU position were the findings of an inquiry it commissioned into insecure work, which defined insecure work as “that which provides workers with little social and economic security, and little control over their working lives”.
The inquiry noted certain forms of employment as prone to being insecure, including casual work, fixed-term contracts, seasonal work, contracting and labour hire. It said part-time workers in non-traditional workplaces (for example, home-based outworkers) also faced insecurity in their work.
Its report estimated that 40 per cent of Australian workers were in insecure work.
In its statement to Fact Check, the ACTU cited a 2015 OECD report that ranked Australia third in the world for non-standard forms of work.
“The share of non-standard workers, comprising self-employed, part-timers, casual workers and those on fixed-term contracts, is high at around 44 per cent, compared to the OECD average of one-third,” the statement said.
Definitions relating to the changing nature of work are varied, and the ACTU’s statement acknowledged this: “The terms non-standard work, precarious work and insecure work have been used interchangeably in the academic and policy literature in recent years. The union movement in Australia has used the term insecure work.”
Jeff Borland, a professor of economics at the University of Melbourne, told Fact Check there was no formal definition of insecure work.
He said “slippage” between definitions, as well as insufficient data relating to new forms of employment such as the gig economy, meant the debate over the rate of casualisation was open to interpretation.
“The debate is beset by loose language. People use the same words to mean different things. We don’t have commonly agreed words.”
Professor Wooden, a labour economics expert, said despite definitional changes, and the fact there was no fixed definition of a gig economy job, it was still possible to debate the issue.
“You can still have a sensible conversation, but the problem is it’s ripe for people to be selective in their facts, to be partial, and you can say none of them are quite wrong.”
A bit more detail about casual employees
A 2018 Parliamentary statistical snapshot of casual workers identified the occupation groups with the highest prevalence of casual employees to be hospitality workers (79 per cent of all workers) and food preparation assistants (75 per cent).
About one-third (31 per cent) of casual workers preferred more hours of work per week compared with 10 per cent of permanent employees.
Casual workers were more likely to face irregular and insufficient hours of work and fluctuations in earnings. About 53 per cent experienced variable earnings from one pay period to another in August 2016 compared with 15 per cent of permanent employees.
Principle researcher Sushi Das; with David Campbell.
- Sally McManus’ speech to the National Press Club, March 21, 2018.
- Sally McManus interview on ABC’s AM radio program, March 21, 2018.
- Craig Laundy interview on ABC’s RN Breakfast program, March 21, 2018.
- Casual Employment in Australia: A Quick Guide, Anthony Kryger, Parliamentary Library, January 20, 2015.
- Non-Standard Employment Around the World, 2016, International Labour Organsiation.
- Characteristics and Use of Casual Employees in Australia, statistical snapshot, Geoff Gilfillan, Parliamentary Library, January 19, 2018.
- Lives on Hold: unlocking the potential of Australia’s Workforce, 2012, independent inquiry commissioned by the ACTU.
- Australian Labour Market Statistics (ABS cat. no. 6105.0), July 2014.
- Employee Earnings, Benefits and Trade Union Membership (ABS cat. no. 6310.0) August 2013.
- Characteristics of Employment, Australia (ABS cat. no. 6333.0) August 2017, Appendix Feature Article Data Cube.