State opposition, Canberra and industry vow to fight sick pay for casuals

The state opposition, federal government and industry groups have vowed to fight the Andrews government’s $245 million scheme to provide casual workers with carer’s payments and up to five days’ sick leave a year.

Premier Daniel Andrews unveiled on Monday details of a two-year pilot program to offer sick and carer’s leave at the national minimum wage of about $20 an hour, or $750 a week, to about 150,000 casual and contract workers in hospitality, retail, aged and disability care, cleaning and security.

Premier Daniel Andrews unveiled the Sick Pay Guarantee scheme on Monday. Credit: Paul Jeffers

Industrial relations experts and unions applauded the move, saying the pandemic highlighted the dangers of workers not having a safety net.

But a state opposition spokesperson attacked the announcement and said it was considering repealing the scheme should it win the November state election.

Federal Industrial Relations Minister Michaelia Cash described it as a “tax on jobs and a handbrake on our economy”.

Mr Andrews said the two-year trial would explore ways to fund the Sick Pay Guarantee scheme in the long term after Treasurer Tim Pallas previously alluded to imposing a “modest” levy on business.

“Insecure work is completely and utterly toxic,” Mr Andrews said on Monday to mark Labour Day – a public holiday with its origins in the union movement’s fight for an eight-hour working day.

“It’s incredibly difficult for people who don’t know when their next shift is coming, have no idea what a full working week will look like, wait most nights for a text message about whether they have a shift the following morning. It’s incredibly difficult to plan, it’s incredibly difficult to make ends meet, and it’s incredibly difficult to keep yourself and your loved ones healthy.”

The state government’s foray into industrial relations is unlikely to cause a constitutional issue, experts say, despite the Victorian government under Jeff Kennett having referred some of the state’s industrial relations powers to the Commonwealth.

Shae McCrystal, a professor of labour law at the University of Sydney, said the state was free to make decisions on sick leave and carer’s payments for casual and contract workers because such workers were not legislated for in the Commonwealth’s Fair Work Act.

Industrial Relations Minister Michaelia Cash said the scheme was “nothing but a tax on jobs and a handbrake on our economy”. Credit: Alex Ellinghausen

“Until we move away from a system where casual employment is deeply entrenched in our labour law system ... these are the things the states can do to make a difference in the lives of workers in the absence of systemic reform,” Professor McCrystal said.

Victorian deputy Liberal leader David Southwick said the government’s announcement was another tax on ailing small businesses, setting the scene for an election-year fight on the dozens of new taxes introduced by the government this term, despite Mr Andrews promising on the eve of the 2014 election not to increase taxes or introduce new ones.

The government backed down two weeks ago on a planned tax on developers to pay for social housing, following industry backlash.

“We need to understand who’s paying this, what it costs and what happens after the trial,” Mr Southwick said. “Daniel Andrews can’t keep throwing out these ideas without proper scrutiny.”

When asked if the Coalition would scrap the trial if elected in November, Mr Southwick said: “I understand why [industry groups] want this tax scrapped, and want this idea scrapped, and to be honest I think that’s where we’ll head as well.”

Victorian Chamber of Commerce and Industry chief executive Paul Guerra said the two-year pilot was unnecessary and now was not the time to impose additional financial burden on the taxpayer.

Wes Lambert from Restaurant and Catering Australia said hospitality venue operators were bewildered by the Premier’s announcement.

“If casual workers are still being paid casual loading rates, why is the Victorian government topping up for sick pay?” Mr Lambert said.

“A large proportion of Victoria’s hospitality sector are casual workers and this has been an arrangement that has been mutually beneficial to both employers and employees over a long period of time.”

University of Technology Sydney law professor Joellen Riley Munton said the scheme was good policy and the idea that casual and contract workers were fairly remunerated because they received a casual loading was false.

“People think casuals are well off because they get a 25 per cent loading,” Professor Riley Munton said. “Often the base they start with is significantly lower than the rate of pay that directly employed staff receive.”

Senator Cash said the Andrews government’s sick leave pay policy was a “sign of things to come under an Albanese Labor government” and that Victorian employers should not be required to pay a “casual worker tax”.

“Labor have consistently attacked those who choose to undertake casual work and the businesses that employ them and when they talk about a ‘portable leave policy’ what they really mean is a casual worker tax on businesses,” Senator Cash said in reference to the federal opposition’s election pledge to give workers in insecure jobs the ability to transfer their entitlements from one role to another.

The United Workers Union welcomed the Sick Pay Guarantee scheme, saying it would go a long way to bolstering financial security for casual workers.

“If the COVID pandemic has shown us anything, it is that casual, precarious and insecure work has ramifications for the health of the whole community,” union national secretary Tim Kennedy said.

Ruby Lethbridge, a casual hospitality worker, said she and her colleagues often went to work sick because they were forced to choose between being paid or going without pay.

“The pandemic perfectly highlighted the problematic structures intrinsic to insecure work,” Ms Lethbridge said.

“I witnessed a co-worker being told to work while they were sick, and instead of getting a COVID test they were instructed to wear two masks and to work in the outdoor section.”

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