Victoria trialing new sick pay for casual workers scheme….will other states follow suit?

In an Australian first, Premier Daniel Andrews has committed some $245 million towards a pilot program to provide up to 5 days sick leave to casual workers in Victoria.

The basics of the scheme are:

  • provide up to five days of sick and carer’s pay per year
  • paid at the national minimum wage rate
  • for eligible casual and contract works in certain occupations

According to the Premier, the COVID-19 pandemic highlighted the risks and problems casual workers faced when having to choose between a day’s pay and taking a day off when sick or needing to care for a loved one.  The report by Service Victoria reveals that before the pandemic 85% of casual workers regularly attended work when sick.

The pilot program which follows a 6 week consultation period last year with industry, workers and community organisations is intended to improve the economic security of workers in vulnerable or casual positions.

The results from the consultation period overwhelmingly revealed that workers felt a sick pay scheme would have a positive impact on their well-being, feeling of financial security and mental health.  Workers surveyed during the consultation period reported having to return to work earlier than they should have after medical procedures due to financial pressures or work pressures. Some reported not being added back into rosters after having time off due to illness.  Other workers reported having to choose between work and the ability to pay rent vs taking off time due to illness.  The report also identified that women and culturally diverse groups are over-represented among casual and contract workers.

Conversely, businesses acknowledged the challenges faced by those in casual employment and expressed a view that any new scheme should not duplicate existing provisions (e.g. protections, rules, definitions or entitlements) to avoid further complicating employment matters.  Employers also urged that the scheme needed to be simple to implement and easy to comply with for both employees and employers.

Overall though a major concern raised by industry was the cost of any ongoing scheme.

Initially, Victorian Government will fund the scheme with any permanent scheme beyond the pilot program expected to be funded from an industry levy.

Workers will need to register for the two-year scheme which can be completed here.  Initially it will cover workers from the food and hospitality, retail, cleaning, security, aged care and disability sectors.

It will also cover self-employed and freelance workers without employees who run a business inside Victoria.

Is the pilot scheme likely to be implemented permanently and will other states follow suit?

Probably, yes.  According to the Service Victoria report, the consultation period highlighted just how important a pilot program of this nature is for improving the well-being of casual workers.  A report by ACTU has revealed there has been a marked rise in the level of those employed in insecure work meaning that this is becoming a larger societal issue.  This is not a dilemma or challenge faced by Australia alone.  Although when compared to our trans-Tasman neighbour, New Zealand, Australia falls well behind in it’s protections offered to casual workers according to a report by RMIT University.  Other OECD countries like Netherlands and Denmark have also wrestled with reconciling divergent social interests and have developed a concept of “flexicurity” to improve conditions for casual employees which is seen as the key to a mobile and flexible labour market.

The success of the scheme will be determined on whether it achieves the objectives – improves well-being and financial security of casual workers and balances the economic objectives and costs.

Based on the initiatives implemented by similar countries across the world, I feel we can expect a permanent scheme of this nature or similar to be introduced across the country.

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