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The COVID-19 pandemic highlights the need to address insecure work

30th July, 2020

This latest guest contribution on the Labour Law Down Under Blog is by Professor Joo-Cheong Tham of Melbourne Law School.

The COVID-19 pandemic has thrown into sharp relief the vice-like grip of insecure work (work that does not have adequate labour security especially in terms of employment and income).

On the one hand, the impact of unemployment has fallen disproportionately on those in insecure work, particularly casual employees. Many industries suffering the greatest drop in employment are heavily casualised (e.g. tourism, hospitality and food sectors). Those in insecure work are also more vulnerable to dismissal as it is typically cheaper and easier for businesses to end their employment rather than those in continuing employment. The exclusions from the JobKeeper wage subsidy scheme have exacerbated these impacts with the exclusion of many casual employees (only those who have been engaged on a regular and systematic basis for at least 12 months are eligible for this payment) as well as the denial of access to temporary visa-holders (except New Zealanders), many of whom would be engaged as casual employees.

On the other hand, the current wave of infections affecting Victoria has spot-lighted the other side of the equation: the risks related to those continuing to perform insecure work. Major outbreaks have occurred at workplaces where insecure work is prevalent: workers at Cedar Meats were engaged in labour-hire arrangements; hotel quarantine security guards were typically engaged as contractors; and many workers in the aged care system are casual employees.

The hazards of insecure work

The connection between insecure work and the increased risk of COVID-19 infections should not surprise us – research has long established that insecure work is connected with adverse workplace, health and safety outcomes.

Three factors, in particular, are of significance: economic insecurity; disorganisation at the workplace; and regulatory failure.

All three factors are at play with recent outbreaks.

Economic insecurity results from a range of interacting circumstances. Most of those engaged in insecure work are from low socio-economic backgrounds. This, together with payment on an hourly basis and a lack of guarantee of continuing employment, produces a powerful compulsion to work whatever hours are available. As the Victorian Premier has aptly observed, these workers ‘have to go and work, otherwise they’re simply not going to get paid’. Such presenteeism clearly works against workers self-isolating after testing (and perhaps even taking the test in the first place).

There is also inadequate social protection for many workers in insecure work. Contractors and casual employees are not entitled to paid sick leave. There is generally no paid pandemic leave for self-isolation or (extended) illness due to COVID-19 (at the time of writing, the Fair Work Commission had just granted paid pandemic leave for aged care workers). Many workers in the security industry are international students who are not entitled to the JobSeeker payment when unemployed.

Economic insecurity contributes to disorganisation at the workplace with those in insecure work less likely to belong to a union, therefore, often lacking effective voice at the workplace, a crucial element in ensuring workplace safety. ‘Fissured’ workplaces where the company hiring the worker is different from that using the labour can also blur lines of responsibility for such safety. This is a clear risk with contracting chains like those used with hotel quarantine: some security guards reported not even knowing who their employers were. Similarly, with labour-hire arrangements such as Cedar Meats: the Department of Health first notified the labour-hire company but only notified Cedar Meats days later resulting in a critical delay in the workplace being shut down.

Then there is regulatory failure. Under the Victorian Occupational Health and Safety Act, employers and those who manage or control workplaces are under a duty to ensure a safe working environment so far as it is reasonably practicable.

Media reports suggest apparent breaches of this duty: many aged-care facilities being poorly prepared for the (foreseeable) COVID-19 outbreaks; security guards at hotel quarantine reporting minimal training and at times, not even knowing that they were working at a hotel dedicated to quarantining return travellers.

The Victorian Government’s issues paper on Victoria’s private security industry provides further insights into the connection between such breaches and insecure work. It notes serious concerns as to ‘(u)nsafe working environments and/or insufficient training and support (including inadequate equipment)’ and that ‘(e)mployers may be less willing to invest in casual and/or transient staff.’ All this interacts with the broader dynamics of illegality. The paper reports disturbing concerns on workers inappropriately engaged as casual employees and also the use of ‘sham contracting’ – both as cost-minimisation strategies. Underpayment of wages and superannuation was ‘particularly prevalent’ in the industry. Workers were often required to undertake training in their own (unpaid) time, in contravention of workplace relations laws.

Stronger action needed from Parliaments and governments

The COVID-19 pandemic has highlighted how the costs of insecure work fall not only on the workers but also on the broader community.

It also underscores that neither such costs nor insecure work itself is inevitable – much turns on how work is regulated by legislation and governments.

The Victorian government could reconfigure its procurement practices to ensure that labour standards are properly provided for in its contracts for security services. The Commonwealth government could provide increased funding of aged care so that secure jobs could be provided in this essential sector. The exclusions under the JobKeeper and JobSeeker schemes could be repealed by the Commonwealth government through the exercise of ministerial powers. The Commonwealth Parliament could, at the government’s initiative, address a ‘regulatory gap’ by providing for universal paid pandemic leave (at the time of writing, the Industrial Relations Minister was consulting with businesses and unions on this question). 

Commonwealth Parliament could also address the ‘officially-sanctioned gap’ constituted by casual employment, amongst others, by codifying under the Fair Work Act the decisions of the Full Bench of the Federal Court in Skene and Rossato: that such employment was typically restricted to situations where there is an ‘absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work’ and, importantly, ensure that the Fair Work Ombudsman has adequate resources to police this definition. It could also tackle the ambiguity surrounding the common law test for employment which allows ‘sham contracting’ to flourish by codifying the definition of employment and providing for a presumption of employment (when personal service is rendered).

Parliaments and governments can address insecure work and its adverse impact on the COVID-19 pandemic – and they should.

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