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Australian and SA Governments sign landmark skills agreement

The Hon Tony Burke MP

Speech – The Sydney Institute

TONY BURKE MP, MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS, MINISTER FOR THE ARTS: Thank you very much, Gerard. It’s a great pleasure to be back at The Sydney Institute. I was a very early associate in the early days of The Sydney Institute, and it’s great to be back. 

I acknowledge the Gadigal people of the Eora Nation and their Elders past and present, and I stand here as a member of a government which sincerely hopes the Australian people respond to the generosity of the Uluru Statement from the Heart with the same level of generosity in return. 

It’s some years since I last spoke here, long enough that according to one of the papers today, this speech is being delivered to – and I quote – “The left leaning Australia Institute”. Gerard, you have changed. Some of you might have not realised what you were turning up to.

At the election, we made a commitment to get wages moving, a commitment to act to close the gender pay gap, and a commitment to deal with job insecurity, and our first workplace relations Bill was to establish Family and Domestic Violence Leave, our second workplace relations Bill was to establish a law referred to as “Secure Jobs, Better Pay”, matching up with the fact that the policy we took to the election was called “Secure Australian Jobs Plan”.  

Last year’s Bill put many of the key aspects of the framework that we had promised to put that in place. But any framework can be threatened by the different methods in which it’s evaded. Effectively those forms of evasion are what we’ve all for years colloquially referred to as loopholes. They’re not unlawful, but they’re loopholes that undercut principles that you otherwise have in law. 

These reforms are about strengthening the current workplace relations framework, providing certainty, fairness and a level playing field for both business and workers. It won’t be radical change, but it’s certainly trying to make sure that the current law works effectively.

For the loopholes that would undercut job security, we intend to close them this year. For the loopholes that make it a criminal offence, as it should be, if an employee steals from an employer, but not if the employer steals from the employee, that is a loophole that we will close this year.

Similarly, the loophole where there is an agreed rate of pay, and the agreed rate is undercut through the strategic use of labour hire, that is a loophole that we will close this year. And finally the loophole where a large number of workers now are doing the exact same sort of work that was always imagined to be covered by the award system, but because of the nature of the gig economy have fallen out of the employment relationship and are now in a circumstance where they have no minimum standards at all. We will make sure they are no longer working with no minimum standards, that there are minimum standards there by closing that loophole. 

Today I want to focus on just one of the loopholes, which is the one with respect to casuals. There’s a term that when you think about it probably shouldn’t exist logically, the permanent casual, and it’s a term that we hear more and more. For someone who is a voluntary permanent casual nothing will change. But for somebody who is a forced permanent casual, there should be a pathway to permanency for them. 

What’s clear is that some casual workers are working in permanent capacities without the job security or benefits that come with a permanent position in law. They lack leave entitlements and can be dismissed without notice. 

The former government’s reforms compounded this problem. They institutionalised job insecurity for casual workers. Now, under the law as it stands, if an employer signs you off as a casual on day one of your employment, and says yes in writing, “there is no firm advanced commitment to ongoing work”, but on day two gives you a roster fixed for the rest of the year, that rort of the system is legal. You’re a casual for the 12 months, and there’s nothing you can do about it.

That’s certainly not what most Australians would expect the definition of casual work was. Workplace relations is at its best when it’s a practical jurisdiction. The legal game here where what is practically and realistically occurring at the workplace is ignored because of what the contract said on day one, runs counter to a fair industrial relations system, and our reform on casuals aims to fix this.

The Government will legislate a fair objective test to provide certainty to business and to provide clearer pathways to permanent work. Our reforms won’t affect the use of casual employment in those cases where it’s genuinely flexible work that benefits both worker and business, where the worker is choosing the shifts that they get, not a situation where they are forced to be a permanent casual with all the expectations of a full time worker but none of the protections.

Our reforms won’t affect cases where workers want to remain casual. Workers will have the option to stay casual if that’s what suits their circumstance. This will be the case for many students in sectors like retail and hospitality. But what our reforms will do is ensure the label “casual” is not rorted to exploit vulnerable workers. 

Our reforms will give workers the tools for genuine dispute resolution, unlike the Morrison Government reforms which demand that in the event of a dispute, a casual worker – think about that – a casual worker, if there’s a dispute, has to get a lawyer and turn up to the Federal Court to have it resolved under current law. 

Now, there have been, and I mention this for completeness rather than annoyance, there have been some fear campaigns about it, which it would be remiss of me to not deal with them directly. There is an ad campaign that’s been running for a couple of months now, I think, which I have found interesting. The words of the ad are these, and I’ve realised now in asking for the words of the ad to be part of the speech, this will now be in my language, so there is a danger there. 

“The Federal Government wants to introduce a new law called ‘same job same pay’. It doesn’t mean equal pay for men and women, it means if you work hard because you want better pay by law, you can’t be paid any more than someone who barely works at all. Let’s find a better way, because same job same pay takes your reward for your hard work away.” Nice rhyming couplets at the end. 

Now, it’s a policy idea that I had never heard of until I saw the ads. The moment I saw the ads I agreed it was a terrible idea. I immediately made clear, publicly and privately, that the Government would not be creating a situation where you could not pay people a different rate based on their experience; made that clear the day the ad campaign started. 

For reasons that I don’t understand, that has made no difference on the ad campaign, it’s still out there running, and the business groups are entitled – it’s a democracy – they’re  entitled to continue running the ads, it’s up to them how they want to campaign, I do get that. 

The campaign, I should announce, will be completely successful. They will take an idea that was not government policy, run an expensive campaign against it, and at the end of the campaign, it will still not be government policy. 

But as I said earlier, the Government will be closing the labour hire loophole. A loophole where an employer had already agreed that for a particular worker with a particular level of experience there should be a specific minimum rate of pay, and then labour hire is brought in to undercut the rate of pay that they’d only just agreed to. That’s the loophole the Government wants to close. 

I’ve focused most of the speech today on that forced permanent casual loophole. But before I go into further detail I do want to say a little bit more about the consultation the Government’s been undertaking. 

Most of those involved in the consultation will acknowledge privately – and I’ll be upfront, I probably wish this would be said publicly as well – that the level of consultation the Government is undertaking now is more than has been seen in my portfolio for many, many years. 

Notwithstanding that we’ve had some public comments. The first was from someone who I had worked well with for my entire time in Parliament, I have to say, and that’s Denita Wawn from the Master Builders, but she was quoted The Australian on 21 May saying, “There hasn’t been consultation, we talk about sham contracting, from our perspective, this has been a sham consultation.” 

More recently, and I’ll just give this as a bit of a case study, there was an interview with an excellent business representative, Tania Constable from the Minerals Council on Radio National Breakfast. 
In that interview she said the following, “The consultation process has not gone well with Government. You provide information, it gets sucked into a black hole and then it comes back out. Not much has changed with most of the issues that we’ve raised, whether it’s employee rights, casuals, same job same pay, but what we’ve now seen is even worse changes to the IR system.” 

But here are the facts, and I’ll just give the example of the Minerals Council, because that was the most recent complaint. My department has held 20 meetings with the Minerals Council and its members in 2023. There’s been a series of additional meetings on top of that that I have conducted personally. The Department meetings have included 17 on workplace relations reforms, three on work health and safety matters. 

My department and I have undertaken extensive consultation on all elements of the legislation that I intend to introduce later this year. Consultations with the Minerals Council actually began last year on some areas, even before the election had taken place, obviously not the ones with the Department; they’re not allowed to talk to me much until we’d won. 

This year my Department has convened more than 75 consultation meetings so far with business groups, trade unions, academics and civil society. We’re still consulting, with further meetings this week. This is in addition to a number of meetings my office and I have had directly with business groups. 

Can I just say that consultation makes a difference. Last year there was a whole lot made of the Senate negotiation, because in the Senate people are aware that the Government doesn’t have a majority. Therefore, people look very closely at all the amendments that might be volunteered or forced on a government through the processes of negotiation in the Senate. 

But that pressure is not on the Government and the House of Representatives, and yet as a simple example, in the House I moved 150 government amendments. Now, those 150 government amendments, some of them were because of issues raised by trade unions and academics, but the vast majority were because of various consequences that had been raised by business groups. 

In the same way the legislation that I introduce later this year will have clauses, tests and expectations which were simply not under consideration at the start of the year. That’s only happening because of the consultation. I’m not sure why some stakeholders have a perverse desire to undermine their own influence and effectiveness. The simple reality is consultation has been happening, it is continuing, and it is making a difference. The Bill that will be introduced will be different because of the consultation, and as it goes through the parliamentary process, that consultation will then commence with Members of Parliament as well. 

I’ll admit with all the scare campaigns, I do have a favourite. There was an article in The Australian on 10 July quoting John Seeley of Seeley International which made some interesting claims, and this one’s a quote which I think I’m going to keep for the rest of my life: “The advice we are receiving is that the draconian industrial relations changes being rammed through will force us to offer these seasonal team members permanent roles with no leave loading, then sack them three months later. The result of this communistic view of the workplace is the death of productivity. What is the incentive to work hard when your peers, no matter what their experience, age or work ethic get paid the same?”  

As a member of the New South Wales Right of the Labor Party it’s not often I’ve been called a communist in my time in politics. I guess sometimes others feel they know you better than you know yourself, and I certainly thank Comrade Seeley for his insight. 

But as I made clear, the key argument there is once again something that we’re not doing to create a circumstance where regardless of your experience, age or work ethic, you get paid the same. That is not the proposal from the Government, and no matter how many times we repeat that that’s not the proposal of the

Government, there’s an argument on the sidelines that appears to be unstoppable, and as I said earlier, ultimately victorious. 

So, in dealing with casuals, let me deal not with fear campaigns or misinformation but with some facts. Whenever I raise the issue of casualisation, the first issue that is often put forward is that there is in fact not a problem, because the percentage of casual workers has remained steady for some time. But there’s more to the story than just that figure. Obviously not everybody who has insecure work is in an employment relationship at all. The entirety of the gig economy doesn’t get counted when you talk about casual workers. 

There are people now as part timers, working effectively under some arrangements with almost no guarantee of how many shifts they will get, if any, in the following week. There are people on back to back contracts who were it not for legislation that we passed last year were effectively on a treadmill of permanent probation. 

Certainly the number of people without leave entitlements has increased and increased significantly through sham contracting and the growth of the gig economy. But beyond that, Professor David Peetz and Dr Robyn May have recently found the following: the majority of workers without leave entitlements have been with their employer for more than a year. Around half of all workers without leave entitlements to annual or sick leave have stable hours one week to the next. Concerningly the data shows that around half of workers without leave entitlements are not receiving the casual loading generally at 25 per cent, potentially an indication of under payment of wages. 

These facts show that so many so called casual employees are really permanent workers in all but name, working regular rosters for extensive periods of time. 

According to the ABS, there are just over two and a half million casuals in the Australian workforce. Strictly speaking, as I said, the way the ABS collects this data is you have to be an employee, but they there look at employees without entitlements, and that’s taken as a rough equation to casuals. 

Of that group – so of that two and a half million, there are 32 per cent, around 850,000, who have a regular pattern of work, and of those around 490,000 of them have worked regularly for their employers for more than a 12 month period. This phenomenon occurs across the industries ranging from retail to hospitality and food services, arts and recreation services, and healthcare and social assistance. All of these industries include hours – all of them – include many hours which will always be best served through casual employment, and all of them include hours which by any measure should be permanent. 

The majority of casuals are female. The majority of workers who have been casual for more than two years are women. The majority of under employed casuals are women, and the majority of people holding multiple jobs are women. Just as there is a gender pay gap, there is a gender security gap. 

There was an article published this year by Innes Willox of the Australian Industry Group on 17 July. Innes is a very respected person in workplace relations circles, he’s been in the policy area a very long time and has been a very strong advocate for legislative changes which would benefit his members. There are a couple of sentences in the op-ed though that really stood out for me, because they’re statistics that would have been available to me, I just hadn’t seen them presented that way before. And I quote, “Our research found 39 per cent of casual employees are between 15 and 24 years old, and another 19 per cent are 25 to 34. Casual employment often provides young employees with entry to the labour market and helps workers balance educational commitments.”  

The interest that many young workers have in casual work is something that I know well. Through my own life it reflected me when I worked as an organiser, as Gerard mentioned. It reflected the nature of many of the people I represented. But what’s stark about the numbers in that article aren’t who it includes, like we always knew there are a whole lot of casuals who are young, but who those statistics exclude. Just do the maths. It tells us that more than 40 per cent of casual workers in Australia are over 35. More than 40 per cent. 

No doubt there will be some people in that group where casual work is exactly what they want, but this is the age group where people are paying their own bills, are supporting dependants, people that have a myriad of fixed costs, costs themselves that are never casual. 

Now I’ll concede, of all the data sets I’d looked at, I had not appreciated that more than 40 per cent of casuals were over 35. It lends real weight to the need to give these workers an option for more security. Behind all these statistics are real people. 

Let me just talk about one meeting I had in Northern Tasmania a couple of years ago. I held a secure jobs forum, so it’s obviously a self selected group, it’s not, you know, going to be statistically relevant. People who have a concern about job security are the people who are going to turn up. It still blew me away as they told me their stories. 

One man in his late 30s who turned up apologised at the start because he said he was a casual when he accepted the invitation, but he’d only just managed to get a permanent job. He was over the moon and in a great mood. So the problems he was going to raise weren’t with him anymore. 
I asked him how long he’d been a casual. The answer was for 14 years. And just informally, to get a sense of budgeting, I asked him, “So what did you do for holidays, or over that time, like it’s 14 years, did you use a loading, did you save it, what did you do?” His response was straightforward, he says, “Oh, no, I didn’t take holidays, just kept working.”  14 years. In Australia. For a man in his late 30s. That’s not what permanent work should look like in Australia. 

Another casual worker at the same meeting told me he’d given up his passion for cycling, because he knows if he has a crash and he has to take some days off there’s no sick leave. His favourite recreation, just let it go. Philosophical about it, but still a big deal. 

A third worker at the forum who had an insecure job was a woman working unpredictable hours. She told me she had school aged kids, and just said, “Look, I can’t commit to coaching them because I never know whether I’ll be available for training or game day. I’d always hoped to coach the kids at sport, but it’s just not an option for me because I’m a casual.”  

One meeting, three people, with impacts on themselves, their families and their communities, all wanting better options for secure work, and the options that we’re putting forward won’t work for all of them. That is a step in trying to provide a shift in Australia back towards secure employment. 

We all know people who are working multiple jobs because none of their individual jobs give them enough hours to cover their expenses. Rent isn’t casual, electricity bills aren’t casual, school fees aren’t casual, they’re a certainty. But people in insecure work do not have the same certainty about their hours or their income, and insecure work doesn’t just affect your pay packet. Try getting a mortgage if you’re a casual. 

Now, it’s hard to find a recent article about casualisation in Australia that doesn’t use the words “WorkPac”, “Skene”, or “Rossato”. 

Ultimately the discussion in those Federal Court cases ended up being superseded by actions in the Parliament. But it is worth looking at exactly who those cases were about, because while they dealt with two different people, they dealt with the same circumstance. A casual employee, a casual employee, is given a 12 month full time roster, which is strictly followed. In both cases the workers were embedded in work crews. The others were direct staff employed by the company. Rio Tinto in Skene’s case, Glencore in Rossato’s. I give them for information of the cases, but this is common across that industry. 

Anyone who is looking objectively at those workers, when they turned up for shift, what they did, would have found them indistinguishable from the full time permanent workers they were working side by side with. Yet for these individuals there was an intersection of two loopholes, the forced permanent casual loophole and the labour hire loophole. 

The forced permanent casual loophole was used to make sure that even though they were working permanently, they weren’t permanent workers. And the labour hire loophole meant that even though they were casual, their hourly rate of pay, including the casual loading was less than the hourly rate of pay for the permanent workers engaged side by side with them doing the same job. Think about that.

You have a worker working side by side with another worker, with the same level of skill, but one of the two doesn’t just have a lower hourly rate of pay, the one with the lower hourly rate of pay is the one with no sick leave and no annual leave. That sort of practice can’t be allowed to stand. And while the issue was being litigated in the courts, the previous government did not wait. It introduced legislation as part of what was known at the time as the omnibus bill, to legitimise what I would contest was blatantly unfair. 

But in one of the more extraordinary scenes I’ve seen in my time as a Member of Parliament, it wasn’t the Opposition that managed to vote down particular provisions of the Bill. It was the government. The Minister at the time, Senator Michaelia Cash, and the Coalition government, voted against all the other parts of their own legislation. They voted against their own legislation that would have criminalised wage theft. They voted against their own legislation that would have modified the better off overall test. And why did they strip the Bill of all those other elements? Because the only commitment that ultimately mattered that day was to make sure that they got the section of the Bill through which would take rights away from casuals. 

At the end of that, whether or not a casual was objectively working in a permanent job became pretty much irrelevant. If the terms of the contract said you were working as a casual, that was the end of the story. Immediately after that vote I made clear that should we be elected; an Albanese Government would return to an objective definition of a casual. The unreasonable definition has now been in effect for two years. The Government will seek to change that this year. 

At the moment the definition of casual within the Fair Work Act is based only on the original offer of employment made to the employee, without taking into account the subsequent conduct of the parties. 

This means that there are plenty of casual workers who are currently being used as though they are permanent workers without the security of permanent employment, just because of what was written on day one of their employment contract, a contract which ultimately bore no relationship to their treatment at work. This is an example of the employer double dipping, taking all the benefits of a reliable and permanent workforce without providing any of the benefits of job security. 

What is written on a signed piece of paper at the start of an employment relationship will often guide what happens next. But sometimes, particularly with casuals, sometimes it doesn’t. And yet the loophole of the current definition is being exploited in a way that has a single outcome. People who objectively would have a right to job security are being denied that right. 

As I mentioned at the beginning, the new definition will meet our election commitment to legislate a fair objective definition of casual employment. In short, the test will be in colloquial terms what’s really going on rather than determined by a contract which may have ended up bearing no resemblance to practical reality. 

In substance we’re returning to the state of the law before the Coalition’s reforms took effect. When a dodgy written contract determined for all time whether you were a permanent worker, if it didn’t reflect the reality on the ground. Just like the individuals in the Skene and Rossato cases. 

We’re keeping the core concept of a firm advance commitment, but ensuring this concept is understood by reference to the totality of the employment relationship. 

Instead of the current situation, where firm and advanced commitment relies solely on the words of the contract on day one, the new test will allow an objective and practical assessment of whether the employer and employee are in fact intending for the hours to be treated as though they are permanent. 

It effectively becomes a “what’s really going on” test. An employee’s status will only change from casual to permanent if an employee applies for the change. There will be no automatic conversion. The reforms are driven by employee choice. There will be no additional requirements for active employer consideration of status after the commencement of employment unless an employee seeks a change of status. 

There will be a six month limitation on the frequency of seeking a change of status, the existing casual conversion framework remains, including the provision that allows employers reasonable grounds to refuse an offer or request a conversion. 

The new definition will provide the change of status is prospective, so no back pay will have accrued. This is not about back pay, it’s not about a cash grab. It’s about a pathway to security for those workers who want the security of the permanent hours they are already working. 

For the vast majority of casuals, nothing changes. No forced conversion, no giving up casual loading. But for those workers who desperately want security and are being rostered as though they were permanent, that job security is in sight. There’s no net cost to business. Employers will pay a loading if someone is casual and will pay leave entitlements if someone is permanent. They don’t pay both. 
Now, I’m not pretending there isn’t an argument against this; of course there’s a counter argument to every proposal. But the counter argument presumes that the lack of security that so many Australians face is an acceptable outcome, even for those who are working hours which can easily be transferred to a permanent job, and in a situation where those workers want to switch. 

That’s a circumstance which, as Australia’s Minister for Workplace Relations, I can’t countenance. I’ll always accept that there are many circumstances where work cannot be guaranteed, and on an ongoing basis. But if someone wants the security of permanent employment and they’re already getting permanent hours, it shouldn’t be too much to ask. 

The outcome of all this is pretty straightforward. There won’t be a massive number of people who want to convert. But there certainly will be some. And for those individuals a conversion to permanent employment will be life changing. They won’t principally be the people who we often think about when we think of casuals. They’re more likely to be a worker who is older, a worker who is supporting a household, or a worker who, for various aspects of their life has seen that there is a pattern of reliability that they are giving to the employer and wants to be able to have that pattern of reliability in the planning of their own life. 

Security in their income, security in their time off, security in something as simple as being able to take a day off when they’re not well. It’s the sort of thing that most Australian workers do take for granted as part of working here, and as a result of closing this loophole, those people who work permanent hours will have the option of permanent employment. 

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