It will have been news to many millions of Australian workers yesterday, to read AIG chief executive Innes Willox’s claim that “insecure work” is just an invention of the union movement.
The hospital cleaners who wait by the phone in the morning to see if they’ll be required to work (and get paid) that day, the teachers who work on year-by-year contracts and the 2.2 million Australians without sick leave, would beg to differ.
The broadest trend in every sector of our economy over the past 20 years has been the growth in insecure forms of work (casual, labour hire, short-term contracts) and an increase in the number of workers who no longer have entitlements once considered a fundamental part of the Australian ‘fair go’.
Unfortunately for employers, it is not just a trend that hurts low-paid workers. It is also a key factor holding back Australia’s productivity.
While the rate of casualisation has stabilised in recent years, this is because employers have simply increased their use of other forms of insecure work.
The use of labour hire and short-term contracts is higher than ever, as employers find more ways to avoid paying employees entitlements like sick leave and holiday pay.
The Productivity Commission estimated that the number of workers employed through labour hire grew by 15.7 per cent a year from 1990 to 2002 and we believe it has continued to grow since then.
Insecure work is spreading into areas that had previously been permanent. For example, in Victorian state schools 58 per cent of teachers in the first five years of their career are on short term (usually annual) contracts. This is a huge issue for young teachers and a major reason why many leave the system.
Some workers may prefer the freedom of this sort of contracting. But many more are trying to pay off mortgages and want the security of a long-term job.
Mr Willox also assumes all of the 1 million “independent contractors” in Australia are genuinely independent, ignoring the widespread issue of sham-contracting.
ABS statistics show that 40% of independent contractors report they have no authority over their own work. In many industries, workers are effectively told that if they want work, they must operate as independent contractors. There is little ‘choice’ being exercised here.
He also mentions the lack of use of casual conversion clauses to prove that casual workers are happy with their lot.
Casual conversion clauses are not widely used because they rely on individual workers to enforce their rights. It is difficult for low-paid workers already in an insecure arrangement to do this without fear of losing their jobs.
For many workers, casual work does not provide the flexibility to look after a family. It simply means being told with a few days’ notice what shifts you’ll be working, and then fitting in family commitments around them.
Many Australian unions have substantial numbers of contractors or casual workers as members. Around a third of TWU members, for example, are not employees but owner-drivers.
Unions are raising this issue because it is one of the most significant economy-wide issues in a generation. Where the rights that workers have fought hard for are being slowly lost, and where risk and uncertainty is so blatantly being shifted from employers to workers.
The Independent Howe Inquiry told us that most workers in insecure work put up with it because they hope to get a secure job someday, and because the alternative is often no job at all.
An Australia where workers forgo basic rights and control over their working lives is not a future that Australian workers want.
Australia’s future does not depend on this sort of race to the bottom. It depends on us increasing productivity through investment, infrastructure and training to create well-paid and well-skilled workforce.
One of the key findings of the Howe Inquiry was that insecure workers are less likely to receive ongoing training at work or increase their skills.
Insecure work may deliver short-term profits for business but in the long-term it is leading to the creation of a workforce that will be less equipped to compete in the 21st century.
The ACTU wants to work with business on the challenges facing Australia’s economy – earlier this week we signed a joint statement with the BCA and ACOSS committing to co-operate to tackle entrenched unemployment in Australia.
We want to work with business to address insecure work too. That’s why we are holding a National Summit in March, next year.
Mr Willox will be among many important business leaders invited. I hope that he can make it, and perhaps better acquaint himself with the concerns of millions of workers trapped in insecure work.
An edited version of this article was published in the Australian Financial Review on 5 December 2012.