Submission to the Select Committee on Job Security | NYCA

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Submission to the Select Committee on Job Security | NYCA

Introduction

 

The National Youth Commission Australia welcomes the opportunity to present this submission to the Senate Select Committee on Job Security. This submission addresses parts a, d, and e of the Committee’s Terms of Reference. It presents findings of the Commission’s Inquiry into Youth Employment and Transitions resulting from the public hearings, workshops, submissions conducted by the Commission in 2019 and 2020, as well as some data and literature collected as part of the Inquiry.

 

The extent and nature of insecure or precarious employment in Australia

 

The extent of precarious work:

 

Precarious employment includes casual work, temporary work (including seasonal work) and ‘gig’ work. Unfortunately, there is little data publicly available on the extent of these forms of employment in Australia. What data is publicly available has limited utility when considering young people because age-group tables are not published.

 

For example, the Australian Bureau of Statistics (ABS) publishes an estimate of the total number of casual employees every quarter.[1] The latest published data from November 2020 shows that there were around 2,485,000 people employed on a casual basis (i.e. without leave entitlements) or around 23.1 per cent of employed people.[2]

 

Relevant data, published occasionally, confirms that young people are more likely to be employed on a casual basis than their older colleagues. For example, in 2016, the ABS reported that around 76 per cent of employed 15 to 19-year-olds and 41 per cent of employed 20 to 24- year-olds were casual employees (ABS 2016).[3]

 

Casual employment among young people has been increasing. A Productivity Commission research paper estimated, using data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, that the proportion of casual workers increased from 34 per cent of 20 to 24-year-old workers in 2008 to 45 per cent in 2018.[4]

 

Data on temporary work are also hard to obtain. The OECD (reported that temporary workers represented around 5.3 per cent of employees in 2017 in Australia.[5] There are no figures available for young people in temporary work.

 

One measure of gig work is the number of independent contractors. These are self-employed people who can usually negotiate their fees and working arrangements and can work for more than one client at a time. Some independent contractors do not have these abilities, and these workers may have insecure employment. Independent contractors represent around 2.3 per cent of young workers, compared with 8.2 per cent of all employees.[6]

 

Better data is needed to understand the extent of insecure work. Better data will allow policymakers and advocates to better respond to insecure work.

 

Recommendation:

 

The National Youth Commission Australia recommends that the Australian Government ensures that the Australian Bureau of Statistics has the capacity and resources to collect and report data on insecure employment by age groups as part of their labour force surveys.

 

The effects of precarious work on young people

 

Young people employed in insecure work struggle to keep their heads above water due to the variability in income and constant shifting from job to job. The story of Tate is a typical example:

Despite having a great resumé with lots of training, it took me four months of looking to find a job. It was underpaid. I wasn’t paid for my trial, and there was a severe lack of communication. I kept hopping from café, hospitality jobs, which were all very familiar. I became appalled at Melbourne’s hospitality scene. Casuals are not valued highly or even paid the minimum wage.

Tate from Oxygen Youth Committee, Moreland Council, Sunshine, 26 March 2019

 

Similarly, Rebecca told the Commission:

So, I started seeking work in 2016. And I saw my friends begin to get casual work at Woolies, McDonald’s, so all retail positions. So, I applied for all there was. And my first job I landed was in 2017, at a local pizza bar, which is a great chance to experience a busy environment. Learnt the ropes quickly. However, I was paid below the minimum wage, and they would only pay me cash-in-hand.

Rebecca, Salisbury Youth Council, City of Salisbury, Adelaide SA, 19 June 2019

 

The Queensland University of Technology’s Work Industry Futures Research Program submission explained the precarious nature of gig work, particularly those facilitated by digital platforms:

The work is precarious because it has low income security, minimal worker entitlements, a lack of superannuation contributions and few opportunities for career development.

Furthermore, rates of pay for digital platform work may represent a significant underpayment compared to minimum employment standards.

Work Industry Futures Research Program QUT, Submission, 29 November 2019

 

Young people find this uncertainty stressful. Tess Farrell, from the SDA, the union that represents retail, fast food and warehouse workers, told the Commission that retails and fast- food workers:

often have their shifts changed. They’re casuals, they get their hours cut back and the uncertainty of not knowing when your next shift will be, not knowing when your next paycheque will be. It’s just extremely, extremely stressful.

Tess Farrell, SDA, Preston VIC, 12 March 2019

 

While wage growth has been relatively low for all workers in recent times, youth wages have been growing at a lower rate than wage growth overall. Precarious work may be a cause of youth wage stagnation because much precarious work is also part-time. The Productivity Commission reported that the growing proportion of young people in casual work were also working part-time.[7]

 

The insecurity associated with casual and gig work has long-term consequences, leaving young people vulnerable to insecure housing or compromised health outcomes, including mental illness. These kinds of diverse and related consequences were reiterated throughout the testimony presented to the Commission. For example, John Thompson, Anglicare WA, noted that:

The lack of stability and security with casual employment makes it difficult for young people to save money, to budget effectively, and also to plan ahead for their future when they have no guarantee of income from week to week or access to basic employment rights like sick leave.

John Thompson, Anglicare WA, Perth WA, 13 August 2019

 

Young people who are already disadvantaged are more likely to be in insecure work. Llewellyn Reynders, reflecting the experience of member organisations of the Victorian Council of Social Service, informed the Commission that:

People who face multiple disadvantages are more likely to experience this [casual] work, including young people, Aboriginal people, people with disability, single parents, older people, women, people with low levels of education, people from culturally and linguistically diverse backgrounds, migrants and people living in rural, regional and outer suburban areas.

Llewellyn Reynders, Victorian Council of Social Service, Melbourne VIC, March 2019

 

Insecure work further entrenches the poverty and disadvantage often experienced by these groups. As Tim Corney, Victoria University, said:

Casualisation has the greatest impact on the weakest labour market participants, the young without doubt and in particular young women concentrated in the lowest skilled occupations.

Tim Corney, Victoria University, Sunshine VIC, 25 March 2019

 

Poverty is further entrenched by an income support system that does not reflect the reality of precarious employment. Many young people rely on combinations of income support and income from work because they face ever-decreasing prospects of a secure job earning sufficient income to live on without additional support. The current income support system hinders young people from building their careers and lives in a precarious labour market.

An improved income support safety net is essential for young people because they are finding it harder to find secure, fulfilling employment. The ACOSS submission stated:

Young people at all qualification levels are finding it much harder to progress from casual or part-time jobs to ongoing, full-time employment, and are doing so later in life.

Australian Council of Social Service, Submission, 25 October 2019

 

Casual, insecure work is becoming long term:

People are staying for quite a long time sometimes in a job that feels insecure, and it is. But for whatever reason, the employer doesn’t want to make it a long-term thing even though it turns out to be a long-term thing.

Dan Woodman, Youth Research Centre, University of Melbourne, Preston VIC, 13 March 2019

 

The prevalence of insecure work represents our society’s failure to ensure that current and future generations of young people will be at least as well off as the immediate past generations. As ACOSS highlighted:

More broadly speaking, the institutions that traditionally underpinned security of income, housing and employment for people of working age- including social security, and home ownership- are crumbling at the edges where young people, and people from low-income backgrounds, are struggling to break into the world of secure and decent jobs, incomes and housing.

Australian Council of Social Service, Submission, 25 October 2019

 

The solution is for The Fair Work Act 2009 to have job security included as an object of the Act and a definition of casual work, limiting its use to genuine casual work. Actual casual work is where employment is not ongoing and work hours are variable.

 

There needs to be a pathway from insecure to secure work. A start would be to guarantee long-term casual employees (under the existing definition) have a right to become ongoing employees with annual leave, sick leave, long service leave and the other benefits of continuing employment. Also, the needs the resources and powers to ensure the rights of vulnerable workers are protected.

 

Recommendations:

 

The National Youth Commission Australia recommends that the Fair Work Act 2009 be amended to include job security as an object of the Act.

 

The National Youth Commission Australia recommends that casual work be defined in legislation limiting its use to genuine casual employment, which is not ongoing and has genuinely variable hours.

 

The National Youth Commission Australia recommends that workers who are now considered ‘casual’ but have ongoing employment be given the right to ongoing secure employment.

 

The National Youth Commission Australia recommends that the rights of ‘gig’ workers be protected in the Fair Work Act and by the Fair Work Commission.

 

The aspirations of Australians including income and housing security, and dignity in retirement

 

All the young people the Commission spoke to wanted to work, and many were striving to achieve long-term career aspirations. They aspire to a fulfilling working life with financial security, housing stability, and secure relationships. Researchers, service providers, and advocates the Commission heard from found similar aspirations among young people.

 

Presenting findings of the Life Patterns Project (2016) by the Youth Research Centre, Dan Woodman told the Commission young people prioritised:

… having financial security, being able to have a secure relationship and to care for and provide for a family. So, what you see here is, in some ways, what you might call traditional

but also may be humble or reasonable, aims for life. And these are the things that people do with their job security.

Dan Woodman, Youth Research Centre, University of Melbourne, Preston VIC, 13 March 2019

 

Jim Stanford, Centre for Future Work, told the Commission:

The young people that we’ve talked to and that we work with are interested in a decent job, regular and predictable income, the ability someday to raise a family and buy a house.

Jim Stanford, Centre for Future Work, Sydney NSW, 19 October 2019

 

However, many young people are struggling to achieve these aspirations. Insecure employment is a large part of the cause. For example, Llewellyn Reynders told the Commission:

 

Stable paid employment provides people with an income and contributes to their sense of identity and wellbeing. We’ve seen the nature of the planet changing over the past few decades, and now many Victorians, including many young Victorians, are employed insecurely. There is an increasing polarisation of employment into high skills, high paying jobs and low skill, low paying jobs. We’re particularly seeing the slow loss of kind of entry- level positions across the economy where previously young people would have made their start in order to progress through their career.

Llewellyn Reynders, Victorian Council of Social Service, Melbourne VIC, 6 March 2019

 

Jim Stanford told the Commission that young people achieving their aspirations of financial security and home ownership are increasingly difficult:

 

The reality is that’s not going to happen if you’re working gig to gig, for sure.

Jim Stanford, Centre for Future Work, Sydney NSW, 19 October 2019

 

The media portrayals of ‘lazy young people’ not wanting to work or wanting the flexibility of casual and ‘gig’ work are simply untrue. However, certain types of flexibility may be desirable. Jim Stanford pointed out:

 

Young people have interests in lots of things and don’t want to get locked into a nine to five routine for the rest of their lives. But surely, we can find ways to offer personal flexibility in your life choices and working routines without consigning people to a life of permanent precarity.

Jim Stanford, Centre for Future Work, Sydney NSW, 19 October 2019

 

The Australian Government could increase young people’s income and housing security by adopting the Youth Income Guarantee [8] as proposed by the National Youth Commission Australia. The Youth Income Guarantee:

 

  • provides a true safety net for young people as they move between study, work and unemployment;
  • ensures that young people have sufficient money to live a healthy life; and
  • provides incentives to study and work to improve employment prospects and build a career.

 

Recommendation:

 

The National Youth Commission Australia recommends that the Australian Government adopt the Youth Income Guarantee.

 

The effectiveness, application and enforcement of existing laws, regulations, the industrial relations system and other relevant policies

 

The Commission heard from young people, trade unions and the Young Workers Centre about the difficulties young people face in the workplace. Not knowing their rights, not knowing who to seek support from, and being fearful of losing their job result in young people being relatively easy to exploit. On the other hand, employers were critical of the complex legal requirements put on employers, which may result in inadvertent underpayment or breach of other conditions. If young people’s employment is to become more secure, there needs to be significant improvements in the adherence and enforcement of young workers’ legal protections.

 

Throughout the Inquiry, the Commission heard from many young people and support services about young workers’ underpayment. It is more bluntly called ‘wage theft’, and though illegal, it is disturbingly widespread among small and large employers. Young people do not always have the knowledge, confidence or capacity to challenge this practice. As Rebecca told the Commission about her underpayment:

 

I didn’t know it was illegal. I didn’t have that prior knowledge or experience.

Rebecca, Youth Council, City of Salisbury, Adelaide SA, 16 June 2019

 

Tess Farrell, SDA, told the Commission:

 

As a union, we know younger workers are often not informed at all about their rights or what they’re entitled to.

Tess Farrell, SDA, Preston VIC, 12 March 2019

 

Even when told of their rights, some young people will not raise the issue with their employer for fear of being dismissed. Brett Edgington, Ballarat Regional Trades and Labour Council, related the story of one young woman who was paid $8.00 per hour, without penalty rates or superannuation. On being informed by him of her entitlements, her response was:

 

I can go to the boss, and I can tell the boss that I’m not getting paid properly, and the boss would sack me straight away, and there is a line of people out the door that would walk in and accept the $8.00 per hour job.

Brett Edgington, Ballarat Regional Trades and Labour Council, Ballarat VIC, 24 June 2019

 

While underpaying workers’ is widespread, employers argue that the blame lies with a complex and cumbersome award system. The Commission heard from employer bodies about the difficulties of navigating the award system, resulting in underpayments of workers. For example, Jodie Gillett, Commerce Ballarat, told the Commission of the complexity of awards in the hospitality industry:

 

… some hospitality businesses can be dealing with over one hundred different rates of pay within one weekend in their business.

Jodie Gillett, Commerce Ballarat, Ballarat VIC, 25 June 2019

 

If fundamental rights, like award wages, are not being enforced, new laws to enhance job security will likely fail for young people who are unwilling or unable to seek redress. Strong oversight and enforcement of industrial laws are needed.

 

In addition to having strong oversight and enforcement of industrial regulations, some simple remedies could ensure that young workers receive their proper entitlements and protections. These are:

 

  • informing young people of their workplace rights
  • supporting small businesses to understand their responsibilities under the awards
  • enforcing more strongly and effectively employers’ adherence to award rates and conditions
  • stronger penalties for deliberately breaching working conditions, awards and enterprise

 

Recommendations

 

The National Youth Commission Australia recommends that the Fair Work Ombudsman enhance its education, assistance and advice to young workers regarding their rights at work.

 

The National Youth Commission Australia recommends that the Fair Work Ombudsman enhance its education, assistance and advice to businesses that employ young workers, particularly in the hospitality and retail industries.

 

The National Youth Commission Australia recommends that the Fair Work Ombudsman seek to enforce more strongly and effectively employers’ adherence to award rates and conditions in industries that employ young workers.

 

The National Youth Commission Australia recommends that the Australian Government introduce legislation that increases the penalties for deliberately breaching working conditions, awards and enterprise agreements.

 

Conclusion

 

The evidence presented to Commission’s Inquiry into Youth Employment and Transitions has confirmed that young workers’ experience of insecure employment has consequences for their transition to ongoing employment, independence and financial security.

 

While better publicly available data is required to understand the extent of insecure work better, there is sufficient evidence available on the need for stronger laws to protect young workers. Young workers and their employers need better education about workplace laws and how to ensure breaches are corrected. Better enforcement of these laws is also required, with greater penalties for deliberate violations.

 

As insecure employment affects young people disproportionately, Australia risks further entrenching poverty, housing insecurity and homelessness, poor health and disadvantage among a generation of young people unless action on job security is taken now.

 

[1] ABS Labour Force, Australia, Detailed, cat. no. 6291.0.55.001, ABS, Canberra.

[2] ABS (2021) Labour Force, Australia, Detailed, cat. no. 6291.0.55.001, ABS, Canberra.

[3] ABS (2016) Characteristics of Employment, cat. no. 6333.0, ABS, Canberra.

[4] Productivity Commission (2020), Why did young people’s incomes decline?, Commission Research Paper, Canberra.

[5] OECD (2021) Temporary employment (indicator). doi: 10.1787/75589b8a-en, OECD, https://data.oecd.org/emp/temporary-employment.htm.

[6] ABS (2020) Characteristics of Employment, cat. no. 6333.0, ABS, Canberra.

[7] Productivity Commission (2020), Why did young people’s incomes decline?, Commission Research Paper, Canberra.

[8] Further information on the Youth Income Guarantee can be found at https://nycinquiry.org.au/.

The Youth Futures Guarantee

 

The Youth Futures Guarantee lays out a framework of reforms and initiatives that will support young people meet the challenges of the future, but these also benefit Australian businesses and the wider Australian community. The Guarantee consists of nine pillars reflecting the priority concerns expressed to the Commissioners at public hearings, community consultations, in submissions and during the Youth Futures Summit:

 

  • Education and training
  • Job creation
  • Employment services
  • Income security
  • Housing and homelessness
  • Health and wellbeing
  • Transport
  • Local community support
  • Climate justice

 

Within each pillar the Commission has identified contributions from governments, Not for Profit organisations, businesses and communities that will improve the lives of young people and assist in their transition from adolescence to adulthood. The income support system has a key role to play and not just in improving income security for young people. Well-designed income support arrangements underpin success in all areas such as education, training, employment, housing, health and wellbeing.

 

About the National Youth Commission Australia’s Inquiry into Youth Employment and Transitions

 

The National Youth Commission Australia’s (NYCA) Inquiry into Youth Employment and Transitions was launched in March 2019 to develop ideas on how young people could be better prepared and supported in their transition from school to work, now and in the future.

 

The Inquiry heard from 1,200 individuals and organisations at public hearings and community consultations across all states and the Northern Territory over a total of 47 days. Of the 1,200 people who Commissioners and workshop leaders met face to face, more than half were young people of school age or in early adulthood, both in and out of the workforce. The Commission also convened focus groups with young people late in 2020 to gather information on their experiences of income support.

 

The Commission convened the Youth Futures Summit in August 2020, which brought together over 1,000 participants in a week-long virtual event to discuss some of the biggest issues facing young people in 2020. Participants included young people, educators, employers, community service workers and policy makers from around Australia. The Inquiry’s interim findings report, What Future?, and the proposed Youth Futures Guarantee were released during the Summit.

 

 

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