Will a court ruling see the demise of casual workers?

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June 03 2020
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A court ruling that allows “permanent casual” staff entitlements, including sick and holiday pay, could deter businesses from hiring new staff, according to new research.

Analysis by Roy Morgan shows the Federal Court’s ruling on casual staff will have an impact on 794,000 businesses in Australia, leaving one in three having to seriously consider staffing needs.

A quarter of businesses, 567,000 (24.5 per cent), said the ruling will “deter them from hiring casual employees”, while over one in 10 businesses, 245,000 (10.5 per cent), said the ruling will have a “large financial impact”.

Most worryingly is as many as 123,000 (5.5 per cent) businesses said they will be “forced to close” because of the ruling.

Roy Morgan CEO Michele Levine said the Federal Court’s ruling on casual employees has the potential to have a significant impact on hundreds of thousands of Australian businesses.

“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,” Ms Levine said.

The survey results also indicated that many businesses are unhappy to pay staff more as well as paying entitlements.

She added: “The biggest direct impact forecast by around a quarter of businesses is that they will be deterred from hiring casual employees in the future. Many businesses mentioned ‘double dipping’ and the fact that casual workers already get a 20 per cent loading for sick pay and annual leave etc.”

Small and medium-sized businesses with 5–199 employees will suffer the biggest impact

According to Roy Morgan, smaller businesses are likely to bear the brunt of the additional costs in labour.

A majority of small businesses (54.5 per cent) with 5–19 employees and medium businesses (54.5 per cent) with 20–199 employees said they will be affected by the ruling in some way.

Over a third of large businesses (36 per cent) with 200+ employees and just under a third of micro-businesses (32 per cent) with 1–5 employees said they will be affected by the ruling in some way.

Agriculture, retail, manufacturing, transport and postal, and wholesale are hardest hit industries

Roy Morgan’s report also revealed the industries with the most casual staff which are likely to be impacted negatively by these changes.

The Federal Court’s ruling on casual employees is set to have a disproportionate impact on some industries, led by transport, postal and warehousing (59 per cent affected), wholesale (54.5 per cent), manufacturing (47 per cent), retail (45.5 per cent) and agriculture (40 per cent).

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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