In a time of crisis, we all pay a price for precarity.
In Australia today, one in three workers cannot access paid leave. In the midst of an outbreak of COVID-19, forcing millions of workers to choose between the possibility of contracting the virus or putting food on the table is immoral. It is a choice that guarantees that some workers, such as a casual hospitality worker in Hobart, will turn up to work sick, causing more people to get infected. Yet it is also a choice to dictate that some of Australia’s most economically vulnerable people should pay the highest price, giving up what little income they have for weeks on end, in order to control the outbreak.
Federal Industrial Relations Minister Christian Porter suggested that casual workers should be prepared for unpaid COVID-19 leave, stating that ‘[m]any people would have already made provisions for that because of course the purpose of casual employment is that you’re paid extra in lieu of entitlements.’ Clearly Porter has very little experience with or is wilfully ignorant of what it is like to support a household while in insecure work.
For a start, the hard economic reality is that there is no actual take-home pay premium for casual workers. Oftentimes, casual workers will be engaged as labour hire workers who are only entitled to a legal minimum base hourly rate for their industry of work, and they will be working side-by-side with permanent staff getting market or union rates of pay on their base hourly wage. On a weekly basis, this reduces the casual wage premium to something in the order of 4% to 5% in take home pay terms. Yet over the longer-term, the best evidence is that a casual worker will earn less than a permanent worker and it’s not hard to work out why: it is the casual worker who bears the risk of going without income during downturns or seasonal lows.
The above comparison also assumes a casual and permanent worker are in the same industry. From what we know, however, casual workers are disproportionately concentrated in accommodation, food services and retail trade. Hospitality and retail workers, in particular, have been subjected to systemic wage theft. There can be no guarantee and no assumption made that many workers in this sector have even been paid a casual loading. Meanwhile, those privileged enough to at least get a legal minimum wage have been subjected to a multi-year penalty rate cut.
And if that’s not enough, Australian workers are experiencing a period of sustained wage stagnation. This is the context in which Minister Porter assumes the overwhelming majority of casual workers (which is what we would need to contain the virus from a public health perspective) would have saved for the prospect of a global pandemic.
You cannot both make people more dependent on a precarious labour market, and then expect them to be able to withdraw their labour in a crisis.
However, it doesn’t have to be this way.
The Australian union movement’s call for two-weeks special leave for all workers affected by the pandemic, whether it is due to the need to self-isolate or because of business slowdown, is a good immediate step.
The experience of COVID-19 and the catastrophic climate-fuelled bushfires highlight the need for every Australian worker to get ten days paid personal leave and ten days paid emergency services leave, and for the personal leave at least to be portable from employer to employer.
Legally and practically this can be done fairly simply, in two steps.
The first step is to make these rights universal. This could be achieved through an urgent amendment to the National Employment Standards in the Fair Work Act 2009 (Cth), which makes personal leave and paid emergency services leave a right for every worker. Given rampant wage stagnation, theft and penalty rate cuts, arguably employers should be able to absorb the full-cost of these measures. After all, it is corporations that will capture the greatest profit-share from a resilient society that has greater capacity to deal with public health emergencies. There is some potential, however, to even out the cost by staging the introduction of paid sick leave out over a two-year period.
This still leaves a gap for people who are not well off but are in genuine individual contracting or freelance arrangements. A model to deal with this already exists in Belgium, and it’s a freelancer co-operative called Smart. Smart works by standing in as the legal employer of a freelance worker so that they receive all the social protections of being an employee but with the benefit of being able to negotiate the details of a job with their clients. With appropriate funding and support, a similar platform can work in Australia. too.
The second step is to make personal leave portable for every worker, whether permanent or casual. This process could kick in the financial year after casual workers have won a full right to personal leave. Currently, unless an enterprise agreement provides for it, workers do not get their personal leave paid out when they leave their employment. The net effect of this is that a significant portion of personal leave is never paid out, whereas in a portable system an employer would have to pay out all personal leave into a centrally managed fund. If the underlying right for a worker remains the same, however, and that personal leave is only accessed if there is a need, then the cost question can be approached from a different perspective.
A centrally managed fund for personal leave would, in effect, become a sovereign wealth fund based on the earned entitlements of workers. This sovereign wealth fund, if given a mandate to invest in Australian enterprise with ethical guidelines, could be a significant engine for sustainable and widespread prosperity. It would be a way of forcing capital to play its social role of actually investing in the future rather than padding the wealth of a connected few.
Furthermore, the staged phasing in of the portability element of personal leave over a five to ten year period (such that an increasing share of accumulated personal leave becomes portable), should even out the costs for individual businesses and provide time to work through specific support measures for smaller enterprises or specific sectors. Meanwhile, those workers who have won the right in a registered enterprise agreement to have their personal leave paid out at the end of their employment could be offered a choice between having the leave paid into the central fund or directly into their own accounts. With a portable system, over time, fewer and fewer workers will feel the need to bargain collectively around what happens at the conclusion of the employment relationship anyway.
Moralising about how people should behave in a labour market, especially at a time when even the market for basic hygiene products, like toilet paper, is breaking down will not solve anything. We face a stark choice between social solidarity or the barbarism of the status quo. We can either have a personal leave system that protects everyone or a system where we are all at risk. The old union chant of ‘touch one, touch all’ has never been more relevant.