Research company Roy Morgan has released the results of a survey of businesses in response to the Federal Court ruling on the entitlements for so-called ‘regular casual’ workers, with dire predictions for hospitality.
The special-edition SMS survey engaged with 881 Australian businesses, extrapolating across the Australian economic landscape, and finding almost 800,000 workers could be affected.
The key point in the Federal Court ruling in May was that casuals employed in regular, predictable shifts are entitled to leave and sick pay on top of their 25 per cent casual loading.
Roy Morgan calculates around 123,000 businesses (5.5 per cent of respondents) will be forced to close, with small and medium-sized businesses employing 5-199 people expected to suffer the biggest impact.
The survey asked: “The Federal Court recently decided that some casual workers, which it held were permanent employees, are entitled to payment of holiday pay and sick pay, in addition to their casual loading, for all time worked during the past six years.
“How will that decision affect your business?”
Almost a quarter of businesses (24.5 per cent – 567,000) responded that the ruling will ‘Deter them from hiring casual employees’, and 10.5 per cent (245,000) say the ruling will have a ‘Large financial impact’.
Hospitality businesses featured heavily amongst those predicting they will be forced to close, likely from a significant reliance on casual employees. Respondents referred to their large populations of casuals, already high labour costs made even higher, the devastation to cashflow and the looming potential for accrued liabilities.
“The biggest direct impact forecast by around a quarter of businesses is that they will be deterred from hiring casual employees in future,” reports Roy Morgan CEO Michele Levine.
“This reluctance to hire casual employees because of the increase in costs and uncertainty surrounding how these workers will be considered in the future is a troubling development in an economy which has just experienced over a million job losses due to the COVID-19 pandemic.”
It is predicted businesses will need to cut costs and/or increase prices, atop dismissing casuals and replacing them with a smaller number of full- or part-time workers.
Many said the additional cost just wasn’t worth it, and suggest the ruling amounted to “double-dipping” when casuals already get a 25 per cent loading, seen as a trade-off for sick pay and annual leave, and that for hospitality the “ramifications are disastrous”. Responses included:
“Adds a high additional cost with no flexibility with rostering. These are additional benefits my business can’t sustain.”
“Casual employees are expensive already. This will price them out of the market.”
“A low hour permanent with a lower hourly rate becomes more cost-effective.”
The Federal government is understood to be consulting with business groups and unions on possible changes to the modern award system to address concerns raised by the court ruling, but there will be pressure on both sides to reach an amicable compromise or suffer the fallout.
“It is incumbent upon the business community and the union movement to come together and reach a truly equitable and sensible outcome about how to handle the industrial relations implications of this decision in the interests of a healthy Australian jobs market,” says Levine.
