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Melbourne. Law School. Legal Studies Research Paper. No. 376. Towards an Understanding of Standard. Employment Relationships under. Australian Labour ...

Melbourne Law School

Legal Studies Research Paper No. 376

Towards an Understanding of Standard Employment Relationships under Australian Labour Law

Joo-Cheong Tham This paper can be downloaded without charge from the Social Science Research Network Electronic Library at: http://ssrn.com

Joo-Cheong Tham, 'Towards an Understanding of Standard Employment Relationships under Australian Labour Law' 2007 20 AJLL 123. Publisher: LexisNexis Australia

Electronic copy available at: http://ssrn.com/abstract=1346202

Articles Towards an Understanding of Standard Employment Relationships under Australian Labour Law Joo-Cheong Tham* The standard employment relationship of full-time work pursuant to an ongoing employment contract is under considerable challenge. Yet, while there is a sense that standard employment relationships (SERs) reflect the ‘deep structure’ of Australian labour law, key questions have not been fully addressed: What are the elements of such relationships? While such employment is usually assumed to be full-time ongoing employment, is this assumption correct? In what sense are standard employees protected? What are the groups of non-standard workers and how does their protection compare with that extended to standard employees? This article will take up these questions by examining the frameworks governing SERs and non-SERs under the Workplace Relations Act 1996 (Cth) before and after the enactment of the WorkChoices Act. It will conclude with preliminary comments on a new framework for standard employment relationships.

Introduction The standard employment relationship of full-time ongoing employment is under serious challenge. Its descriptive accuracy is doubtful, with full-time permanent employees now constituting less than two-thirds of all employees. Non-standard work is increasingly typical with the rest of the workforce primarily engaged as casuals, fixed-term/task employees and self-employed contractors.1 The desirability of a standard based on full-time ongoing employment is * Centre for Employment and Labour Relations Law, The University of Melbourne. Special thanks to Stephen Sempill for exceptional research assistance and to anonymous referees for stimulating comments. This article draws on my doctoral thesis, which was expertly supervised by Richard Mitchell. It was completed before the passage of the Workplace Relations (A Stronger Safety Net) Act 2007 (Cth), and therefore does not consider its operation. 1 For relevant data, see Australian Bureau of Statistics, Employee Earnings, Benefits and Trade Union Membership Australia, Cat No 6310.0, 2003; Productivity Commission, The Role of Non-Traditional Work in the Australian Labour Market, 2006, p 10. It should be noted that use of the term ‘casual employee’ in this article is based on the definition used by Australian Bureau of Statistics, that is, ‘casual employees’ refer to employees without an entitlement to paid annual or personal leave. Such workers may or may not be casual employees under awards or statutory definitions: see J-C Tham, ‘Legal conceptions of casual employment’ in J Teicher, P Holland and S Turberville (Eds), The Proceedings of the 17th AIRAANZ Conference: Refereed Papers, AIRAANZ, 2003, pp 612–24.

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also questionable. It fails to accommodate different patterns of working-time2 and hinders the ability of workers to combine paid work with other socially useful activities like caring and education. Informed by the model of the ‘Harvester man’, a male breadwinner with a wife and dependent children who works full time,3 such a standard is especially insensitive to the needs of working mothers. The protective purpose of labour law is also ill served by this standard.4 It has meant that many of those engaged in non-standard employment are either unprotected or enjoy inferior protection. It is in the sense that non-standard workers, in particular, casual employees, are said to be legally precarious.5 These criticisms of ‘standard employment’, in fact, draw on three different meanings of the concept. ‘Standard employment’ is, firstly, used as a short hand to refer to a particular type of employment arrangement, namely, full-time work pursuant to an ongoing contract of employment.6 It is also used to mean employment arrangements that are typical. Under this meaning, standard employment means employment arrangements that are the most common in a labour market.7 There is a third sense in which standard employment is used. According to this meaning, the standard employment relationship acts as a ‘regulatory pivot’ of Australian labour law,8 that is, those engaged under standard employment relationships are both protected and privileged by labour law. They are protected because they enjoy minimum entitlements. They are also privileged in that non-standard employees tend to be precarious in the sense of enjoying no or inferior protection. 2 For the reasons why patterns of working time are increasingly flexible, see G Bosch, ‘Working time: Tendencies and emerging issues’ (1999) 138 International Labour Rev 131 at 137–47. 3 See, generally, R Hunter, ‘Women Workers and Federal Industrial Law: From Harvester Man to Comparable Worth’ (1988) 1 AJLL 147; A Chapman, ‘Work/Family, Australian Labour Law and the Normative Worker’ in J Conaghan and K Rittich (Eds), Labour Law, Work and Family: Critical and Comparative Perspectives, Oxford University Press, New York, 2005. 4 The canonical statement of such a purpose is that of Kahn-Freund: ‘The main object of labour law (is) to be a countervailing force to counteract the inequality of bargaining power which is inherent and must be inherent in the employment relationship’ (quoted in P Davies and M Freedland, Kahn-Freund’s Labour and the Law, 3rd ed, Stevens, London, 1983, p 18). 5 This is a primary concern of labour law articles examining ‘atypical’ work. See, eg, B Brooks, ‘Aspects of Casual and Part-Time Employment’ (1985) JIR 158; R Hunter, ‘Representing Gender in Legal Analysis: A Case/Book Study in Labour Law’ (1991) 18 MULR 305 at 317–18; K Jurgen-Bieback, ‘The Protection of Atypical Work in Australian and West German Labour Law’ (1992) 5 AJLL 17; A Stewart, ‘“Atypical” Employment and the Failure of Labour Law’ (1992) 18 Australian Bulletin of Labour 217; R Owens, ‘Women, “Atypical” Work Relationships and the Law’ (1993) 19 MULR 399. 6 For an example of this use of ‘standard employment’, see J Fudge, ‘Precarious Employment in Australia and Canada: The Road to Labour Law Reform’ (2006) 19 AJLL 105 at 105. 7 For pieces using standard and non-standard employment in this sense, see A Kalleberg, ‘Non-standard Employment Relations: Part-time, Temporary and Contract Work’ (2000) 26 Annual Review of Sociology 341. 8 I Campbell and J Mathews, Researching the Model of Standard Working Time in Australia: Theoretical Preliminaries, 1998, pp 12–14.

Electronic copy available at: http://ssrn.com/abstract=1346202

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It is the regulatory meaning of ‘standard employment’ that is the most significant. As Cordova has observed: It is not so much the appearance and proliferation of new occupational activities that observers find disquieting as the fact that they lie outside the bounds that hitherto had delimited ordinary and even special employment relationships.9

If non-standard employment were adequately protected, workers seeking to combine paid work with other activities would not find themselves in a legally precarious position. Similarly, the protective purpose of labour would not be undermined by the growth of such work. How standard and non-standard employment is constituted and protected then reflects the ‘deep structure’ of labour law. However, we have yet to develop a proper understanding of standard employment relationships under Australian labour law.10 Key questions have not been fully addressed: While such employment is usually assumed to be full-time ongoing employment, is this assumption correct? Standard employees are said to be protected but in what sense are they protected? In particular, what forms of labour security are being protected? What are the groups of non-standard employees? How are the conditions of such work protected and how does such protection compare with that extended to standard employees? The principal aim of this article is to provide an investigation of these questions. It begins by setting out the nature of its inquiry into standard employment relationships under Australian labour law. The article looks at the past by examining the framework governing standard employment relationships under the Workplace Relations Act 1996 (Cth) (WR Act) before the enactment of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (WorkChoices Act). The next section is present-focused and sets out the revised framework relating to standard employment relationships under the current WR Act. The article concludes by looking to the future with preliminary comments on a new framework for standard employment relationships.

Inquiring into Standard Employment Relationships under Australian Labour Law Gerhard Bosch has defined the traditional standard employment relationship (SER) as a: 9 E Cordova, ‘From Full-time Wage Employment to Atypical Employment: A Major Shift in the Evolution of Labour Relations?’ (1986) 125(6) International Labour Rev 641 at 641. Similarly, Owens has observed that ‘[a]n enduring criticism of non-standard work is the lack of workplace rights attaching to it’: R Owens, ‘Engendering Flexibility in a World of Precarious Work’ in J Fudge and R Owens (Eds), Precarious Work, Women, and the New Economy, Hart Publishing, Portland, 2006, p 329 at p 338. 10 See, however, J C Tham, ‘Job Security Laws: Constituting “Standard” and “Non-Standard Employment”’ in C Arup et al, Labour Law and Labour Market Regulation, Federation Press, Sydney, 2006, Ch 34.

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stable, socially protected, dependent, full-time job . . . the basic conditions of which (working time, pay, social transfers) are regulated to a minimum level by collective agreement or by labour and/or social security law.11

A crucial distinction made by Bosch is that between the form of an SER and its substance. The substance of SER is determined by its more enduring functions whereas the form is merely how the SER is expressed at a particular point in time.12 For instance, the form of the traditional SER is full-time and ongoing/permanent employment while, for Bosch, the substance of SERs rests five functions, namely, the: • protection of workers from economic and social risks; • reduction of social inequality; • increase of economic efficiency; • promotion of equal access for men and women to the employment system; and • provision of support for lifelong learning.13 Bosch’s conceptualisation of SERs offers important insights for labour law scholarship. First, the functions of SERs reveal how they are multi-dimensional, with both social and economic rationales. There is a clear recognition that ‘any employment contract is, indivisibly, an economic and social bond’14 and, more generally, that labour law is animated by various objectives.15 Second, the notion of SERs reveals how labour law is informed by a particular logic of protection that rests on certain forms of work. These forms of work, namely, SERs and non-SERs, function as conceptual devices for parcelling out labour protection. They determine not only which groups of workers enjoy protection under labour law but also the type of protection they enjoy. In doing so, these forms of work reflect assumptions as to which type of workers are deserving of protection and what forms of labour security should be protected. Third, there is no assumption that the key forms of work are those performed under contracts of employment/contracts of service and those undertaken under contracts for services.16 While the difference between employees and independent contractors will not be discarded under an approach grounded in SERs, it will be situated alongside other distinctions of 11 G Bosch, ‘Hat das Normalarbeitsverhalnis eine Zukunft?’ (1986) 39 WSI-Mitteilunger 163 at 165, cited in G Bosch, ‘Towards a New Standard Employment Relationship in Western Europe’ (2004) 42(4) BJIR 617 at 619 (‘Towards a New Standard Employment Relationship’). 12 Bosch, ‘Towards a New Standard Employment Relationship’, above n 11, at 621. 13 Ibid. 14 A Supiot, Beyond Employment: Changes in Work and the Future of Labour Law in Europe, Oxford University Press, New York, 2001, p 136. 15 See discussion in R Mitchell and C Arup, ‘Labour Law and Labour Market Regulation’ in Arup et al, above n 10, pp 9–15. 16 The boundary between employees and independent contractors is a key focus of Australian labour law texts, see, eg, J Macken et al, Law of Employment, Law Book, Sydney, 2002, Ch 1; M Pittard and R Naughton, Australian Labour Law: Cases and Materials, 4th ed, Butterworths, Sydney, 2003, Ch 3; B Creighton and A Stewart, Labour Law, 4th ed, Federation Press, Sydney, 2005, Ch 11; R Owens and J Riley, The Law of Work, Oxford University Press, Melbourne, 2007, pp 136–44.

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significance. With such an approach, other forms of work (eg, casual and fixed-term/task employment, employment that has lasted less than a year) become significant for understanding patterns of labour protection. A taxonomy of SERs and non-SERs has the potential then to offer a more nuanced understanding of such protection. Such a taxonomy will highlight a crucial feature of labour law: the protective function of SERs is necessarily accompanied by its selective function. As Muckenberger perceptively observed: If protective state intervention is extended according to the degree to which an existing employment relationship meets the ‘standard’, it necessarily discriminates against those employment relationships which do not meet the standard. The higher the degree of divergence from the standard, the more non-standard employment will be discriminated against. State regulation in the form of a SER thus shows a tendency towards discrimination against non-standard work.17

Better understanding of the protective and selective functions of SERs and non-SERs will cast light on the choices made by employers and workers. For both groups, their decisions as to what type of work to offer or to accept are clearly influenced by their perceptions of the relative advantages and disadvantages of different forms of work;18 perceptions that will be shaped by the forms of work embodied in SERs and non-SERs. In other words, the legal framework of SERs and non-SERs will provide the regulatory context in which employers and workers decide whether or not to engage or to be engaged as independent contractors, casual and fixed-term/task employees. Importantly, Bosch’s conceptualisation of SERs and non-SERs provides a route from ‘what is’ to ‘what ought to be’. It recognises that the form of SERs is not immutable and does not have to take the shape of full-time ongoing employment. Dissatisfaction with this specific form of SERs, therefore, does not mean that the notion of SERs needs to be jettisoned. Rather, it points to the imperative of envisaging and devising other forms of SERs by drawing upon the substance of SERs. This article does not attempt to take up all of these issues. Its scope is much more modest and is largely devoted to examining ‘what are’ (and ‘what were’) SERs and non-SERs under the WR Act. It also does not grapple with all the functions of SERs and focuses on the protective and selective functions of SERs. Adapting Bosch’s words, the principal question is how do SERs and non-SERs under this Act ‘protect that special commodity, labour, from the vagaries of the market’?19 17 U Muckenberger, ‘Non-standard Forms of Work and the Role of Changes in Labour and Social Security Regulation’ (1989) 17 International Jnl of the Sociology of Law 381 at 389. 18 For a discussion of relative advantages and disadvantages of engaging casual employees, see I Campbell, ‘Casual Employees and the Training Deficit: Exploring Employer Calculations and Choices’ (2001) 9 International Jnl of Employment Studies 61 at 78–93. 19 Bosch, ‘Towards a New Standard Employment Relationship’, above n 11, p 619 (original emphasis). As Marx observed, ‘ [i]f . . . labour is a commodity it is a commodity with the most unfortunate attributes. But even by the principles of political economy it is no commodity, for it is not the free result of a free transaction’: K Marx, Economic and Philosophical Manuscripts of 1844, Progress Publishers, Moscow, 1977 ed, pp 29–30 (original emphasis).

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Drawing upon Bosch’s conceptualisation,20 SERs will be defined in this article as employment relationships that are protected to a minimum level by awards and/or legislative provisions in relation to basic working conditions. Under this definition, a worker is protected to a minimum level in relation to basic working conditions when these conditions need not be bargained for and are provided by award and statutory provisions as a matter of legal entitlement. Typically, such protection will mean that clauses in contracts and other workplace agreements that provide for inferior terms will be prohibited and rendered void. For workers protected to a minimum level in relation to the basic working conditions, these conditions will form the floor upon which agreements are made. The next two sections focus on four aspects of basic working conditions: an entitlement to a minimum wage, protection against dismissal, regulation of working hours and leave entitlements and will respectively examine the position under the WRA pre and post-the WorkChoices amendments. Each section of the article is divided into three parts. The first sets out the minimum entitlements under each statutory regime. The second analyses how these entitlements discharge the protective function of SERs by addressing the following questions: How is labour security protected by these entitlements? What conditions need to be met before a worker enjoys these entitlements or, put differently, what are the incidents of SERs? The final part examines the selective function of these forms of SERs. In this discussion, the article examines how the formation of non-SER engagements is regulated. It considers, in particular, how the WRA defines circumstances in which such engagements are permitted, restricts the length of such engagements or limits the number or proportion of non-SER workers. The article also compares the minimum entitlements of non-SER workers with those enjoyed by SER workers. The gap in the protection enjoyed by these different groups of workers will determine the extent to which non-SER workers are precarious in the sense of experiencing protection inferior to that enjoyed by SER workers.

Standard Employment Relationships under Pre-WorkChoices Regime Minimum entitlements Prior to the enactment of the WorkChoices Act, minimum entitlements were provided partly through statutory provisions, in particular, Pt VIA of the WR Act which was appropriately entitled ‘Minimum Entitlements of Employees’. These provisions, however, had limited significance with minimum entitlements largely conferred by federal awards. These awards were not only a direct source of entitlements but also underpinned statutory agreements by virtue of the no-disadvantage test.21 20 See text accompanying nn 11–12 above. 21 The test means that an agreement will only be certified, or approved in the case of AWAs, if it does not result in the overall terms and conditions of the employee comparing unfavourably with the provisions of any relevant award: WR Act (pre WorkChoices Act) s 170XA. Various commentators have noted problems with the operation of the ‘No

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The entitlement of workers to a minimum wage generally depended on whether they were covered by a federal award.22 Minimum entitlements in the area of protection against dismissal, on the other hand, were derived from statutory provisions and standard awards. Entitlements under the WR Act included protection against unfair dismissal23 and an entitlement to notice prior to dismissal.24 The Act prohibited discriminatory dismissals through s 170CK of the Act which generally prohibited an employer from terminating the employment of an employee on various prescribed grounds including race, sex and religious beliefs.25 Further, Pt XA of the Act also prohibited an employer that was a constitutional corporation from engaging in various conduct directed at an employee on the basis of union membership or non-membership.26 Minimum entitlements under the pre-WorkChoices framework also included protection in the event of redundancies. Federal awards provided a standard entitlement to redundancy pay and imposed notification, information and consultation obligations on employers in the event of redundancies.27 There was also a statutory avenue to apply to AIRC for an order for redundancy pay.28 In some circumstances the AIRC had the statutory power to require employers to consult with trade union representatives.29 Under the pre-WorkChoices framework, there was no direct statutory

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Disadvantage Test’; see, eg, O Merlo, ‘Flexibility and Stretching Rights: The No-Disadvantage Test in Enterprise Bargaining’ (2000) 13 AJLL 207; R Mitchell, A Campbell, E Barnes, K Bicknell, K Creighton, J Fetter and S Korman, What’s Going on with the ‘No Disadvantage Test’?, Centre for Employment and Labour Relations Law Working Paper No 33, 2005. See WR Act (pre WorkChoices Act) ss 88A(b), 88B(2). An exception to this were Victorian employees with s 501 of the WR Act (pre WorkChoices Act) authorising the AIRC to set the minimum wage for Victorian employees other than those covered by an award, certified agreement or AWA. WR Act (pre WorkChoices Act) Div 3 Pt VIA. Under this Act, awards could not deal with unfair dismissals because termination of employment is not an ‘allowable award matter’: ibid, s 89A(2). Moreover, allowable award matters which might have been able to encompass some protection against unfair dismissal, like notice of termination, have been interpreted so as not to include such matters: Re Award Simplification Decision (1997) 75 IR 272 at 325. WR Act (pre WorkChoices Act) s 170CM. These prohibitions are not breached if the reason for the termination is based upon the inherent requirements of the job: WR Act (pre WorkChoices Act) s 170CK(3). Neither are they breached if there is a termination of employment of a worker engaged by a religious institution when the employer terminates such employment in good faith to avoid injury to the religious susceptibilities of adherents of the religion concerned: ibid, s 170CK(4). WR Act (pre WorkChoices Act) ss 298K(1)(a), 298L(1)(b). Redundancy Pay Decision (2004) 134 IR 371. See also Redundancy Pay Supplementary Decision (2004) 134 IR 57. WR Act (pre WorkChoices Act) s 170FA. The AIRC signalled that its discretion under this section would not necessarily be exercised in favour of making such orders; see, in the context of making orders with respect to severance pay, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v United Milk Tasmania (2000) 140 IR 51. WR Act (pre WorkChoices Act) ss 170FA, 170FB. For a discussion of the corresponding provisions in the Industrial Relations Act 1988 (Cth), see B Pragnell and P Ronfeldt, ‘Redundancy Under Enterprise Bargaining and New Federal Laws’ in R McCallum, G McCarry and P Ronfeldt (Eds), Employment Security, Federation Press, Sydney, 1994, pp 120–7.

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regulation of working hours. Minimum entitlements in this area were solely a function of federal awards. These awards generally required workers engaged as full-time or regular part-time employees to be provided with regular working hours. For full-time employees under awards, their hours of work would usually be the ordinary working hours under the award.30 With respect to regular part-time employees under the awards, the overwhelming majority of federal awards defined such employees to be those who worked less than the ordinary working hours and had reasonably predictable hours of work.31 More often than not, this requirement of regularity of working hours was part of the award’s definition of a regular part-time employee. Federal awards also generally required that the regular part-time employee and the employer had to agree on the pattern of work upon engagement of the employee.32 Federal awards also regulated working hours by limiting overtime hours to ‘reasonable’ overtime.33 They required higher rates be paid for work performed during non-standard hours. For full-time and regular part-time employees under awards, both groups were usually paid overtime rates for work outside their ordinary working hours.34 Penalty rates also applied to work on weekends35 and on public holidays.36 Under the pre-WorkChoices regulatory framework, the minimum annual37 and personal leave38 entitlements were provided by standard award clauses. Under these clauses, five days of personal leave could be used as carer’s leave, that is leave for the purpose of caring for a sick member of the immediate family or household.39 Some workers also had a minimum entitlement to unpaid parental leave of 12 months by virtue of Sch 14 of the WR Act.40 Employees covered by federal awards had a similar entitlement which, however, could be extended to a maximum of 24 months if the employer so agreed.41 Importantly, the federal parental leave schemes conferred upon eligible 30 See, eg Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cl 26 and Metal, Engineering and Associated Industries Award 1998 Pt I cl 6.1. 31 See, eg, Building Services (Victoria) Award 2003 cl 22.5 and Child Care Industry (Australian Capital Territory) Award 1998 cl 4.3.4 (contra Transport Workers Award 1998 cl 12.3.1). 32 See, eg, Clerical and Administrative Employees (Victoria) Award 1999 cll 13.5.1–13.5.3; Commercial Sales (Victoria) Award 1999 cll 15.3.1–15.3.3; Clothing Trades Award 1999 cl 17. 33 See Reasonable Hours Test Case (2002) 114 IR 390. 34 See, eg, Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cl 28 and Metal, Engineering and Associated Industries Award 1998 Pt I cl 6.4.1. 35 Child Care Industry (Australian Capital Territory) Award 1998 cl 6.5; Commercial Sales (Victoria) Award 1999 cl 27; Grocery Products Manufacture — Manufacturing Grocers Award 2003 cl 31; Horse Training Industry Award 1998 cl 19.3. 36 See, eg, Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cl 19 and Metal, Engineering and Associated Industries Award 1998 Pt I cl 6.4.7–6.4.9. 37 Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1995 cl 30.1. See also Metal Industry Award 1984 Pt 1 cl 7.1.1(a)(i). 38 See, eg, Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cl 31.3.1. 39 Re Award Simplification Decision (1997) 75 IR 272 at 314–15. 40 WR Act (pre WorkChoices Act) s 170KA Sch 14. 41 Employers may only refuse a request to extend such leave on reasonable grounds: Parental Leave Test Case (2005) 143 IR 245 at [396].

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employees rights pertaining to job security. One commentator has gone so far as to observe that the right to parental leave is: one of job security — the right to get your old job back at the end of the leave, as one does after sick leave, annual leave, long service leave and the like.42

In this respect, these schemes provided that employees, upon returning from leave, were entitled to the position they held prior to commencing parental leave.43 In the event that their position no longer existed, the employee was then entitled to an available position for which they were qualified and capable of performing which was most comparable in status and pay to their former position.44 These schemes buttressed these ‘return to work’ rights by prohibiting the employer from terminating the employment of the employee on the ground of her pregnancy; or him or her applying or taking parental leave.45

Protective function of pre-WorkChoices SERs Under the pre-WorkChoices framework, the employment security of workers employed in SERs was reasonably well protected, with such workers enjoying protection against unfair and discriminatory dismissals, an entitlement to notice prior to dismissal, protection in the event of redundancies and rights to job security while on parental leave. In relation to working-time security,46 there are three key aspects of significance: duration, scheduling and distribution.47 A mixed picture emerges on all three fronts. On its face, the duration of working hours was fixed at full-time hours or a set of regular hours. This was, however, only the prima 42 B Smith, ‘Maternity Leave: Still Unpaid and Still Uncertain’ (2002) 15 AJLL 201 at 201. 43 Assuming that such an employee is entitled to protection against unfair dismissal, this entitlement would overlap with such protection. 44 WR Act Sch 14 cl 12; Sch 1A cl 14; cl 9 of the present standard federal award as found in Supplementary Award Simplification Decision (1998) 44 AILR 3-893; IRA 1996 (NSW) s 66; IRA 1999 (Qld) s 32; Fair Work Act 1994 (SA) Sch 5 cl 7 and Minimum Conditions of Employment Act 1993 (WA) s 38. 45 WR Act Sch 1A cll 13(2), 25(2), 38(2); IRA 1996 (NSW) s 68(1); IRA 1999 (Qld) s 34. The absence of such a prohibition in various schemes does not mean that affected employees do not enjoy protection against termination on the ground of pregnancy or applying/taking maternity leave. Such protection would stem from general industrial legislation and/or anti-discrimination statutes, see, eg, s 170CK(2)(f) of the WR Act and s 7 of the Sex Discrimination Act 1984 (Cth). 46 Guy Standing has identified seven key forms of labour security: labour market security, employment security, job security, work security, skill reproduction security, income security and representation security: G Standing, Global Labour Flexibility: Seeking Distributive Justice, Macmillan, Basingstoke, 1999, p 52. See also G Standing, ‘The Need for a New Social Consensus’ in P Van Parijs (Ed), Arguing for Basic Income, Verso, New York, 1992, pp 47–8; G Standing, ‘Globalization, Labour Flexibility and Insecurity: The Era of Market Regulation’ (1997) 3 European Jnl of Industrial Relations 7 at 8–9 and G Standing, Beyond the New Paternalism: Basic Security as Equality, Verso, New York, 2002, p 10. 47 For a similar conceptualisation of working time that identifies three dimensions of ‘standard working time’, namely, its duration and the positioning and division of hours, see Campbell and Mathews, above n 8, p 7.

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facie position with workers obliged to work reasonable overtime hours.48 Such hours although were not subject to any specific maximum. Indeed, under the pre-WorkChoices regime, federal awards could not set the maximum number of working hours for regular part-time employees.49 On the one hand, regulation of the scheduling and distribution of the working hours of SER workers under federal awards was reasonably robust, with regularity assured in terms of their ordinary hours of work. By contrast, however, the scheduling and distribution of work outside this band of hours were not directly regulated.50 Workers covered by federal awards were, of course, entitled to increased rates of pay for work during such hours. Yet this is what Rubery and others have aptly dubbed ‘voluntary protection of standard hours’.51 The optional nature of such protection is reflected in its individualised character, the choice of whether or not to work non-standard hours being determined by the individual worker and not by collective processes. This was so despite the likelihood that the decision by an employee to work non-standard hours would affect the position of other employees, for instance, by creating a climate whereby working non-standard hours becomes the norm. The optional character of penalty and overtime rates is further reinforced by the fact that, while such rates did increase the costs to the employer of scheduling work during ‘unsocial’ hours, they also increased the attractiveness of such work especially to indigent workers. Another feature of the protection afforded to SER workers under the pre-WorkChoices regime is that it tended to increase with the length of continuous service the employee had with a particular employer. Annual leave under federal awards was available only after an employee had served 12 months of continuous service.52 The same applied to unpaid parental leave under the WR Act and federal awards.53 Entitlement to personal leave (including carer’s leave) under these awards was not subject to a 12-month threshold but did however increase with the length of continuous service.54 Moreover, with protection against dismissal, the period of notice to which 48 Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1995 cl 28.1.1; Metal Industry Award 1984 Pt 1 cl 6.4.2(a). See Reasonable Hours Test Case (2002) 114 IR 390. 49 WR Act (pre WorkChoices Act) s 89A(4)(b). 50 Indirect reference is, however, made to such considerations in provisions dealing with the obligation to work reasonable overtime hours with notice given by the employer to the employee of the overtime work a factor in determining whether such work is reasonable. See, eg, Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1995 cl 28.1.2(d); Metal Industry Award 1984 Pt 1 cl 6.4.2(b)(iv). 51 J Rubery, K Ward, D Grimshaw and H Beynon, ‘Working Time, Industrial Relations and the Employment Relationship’ (2005) 14 Time and Society 89 at 93. 52 Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1995 cl 30.1; Metal Industry Award 1984 Pt 1 cl 7.1.1(a)(i). 53 WR Act Sch 14 cl 3(2)(h); Sch 1A cl 4; cl 2.1 of the present standard federal award as found in Application for variation of the Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 (1998) 44 AILR 3-893 (Supplementary Award Simplification Decision). 54 Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cl 31.3.2; Metal, Engineering and Associated Industries Award 1998 Pt 1 cl 7.2.4(a). See also WR Act ss 500, 504, 506–508 Sch 1A para 1(b).

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an employee was entitled increased with the length of continuous service.55 Under federal awards, protection in the event of redundancy either in the form of redundancy pay or through notification and consultation requirements imposed upon employers was denied to employees with less than one year of continuous service.56 The redundancy pay scales also made clear that the longer the period for which an employee has served continuously, the greater his or her entitlement to redundancy pay.57 To a lesser extent, the length of an employee’s continuous service was also important in terms of protection against unfair dismissal under the pre-WorkChoices regime. Back then, the WR Act prohibited an application for unfair dismissal unless the applicant employee had completed ‘the qualifying period of employment’ with the employer.58 Under the Act, three months was set as the default period for the ‘qualifying period of employment’.59 In sum then, the minimum entitlements of SER workers under the pre-WorkChoices regime were characterised by several features: reasonably robust protection of employment security and working-time security and a bias in favour of longer-serving employees. In order to access such protection, however, the employment arrangements of a worker needed to generally meet the following conditions: • award coverage; • engagement pursuant to a contract of employment; • an ongoing contract of employment with a single employer that had lasted more than a year; • performance of regular working hours; and • non-casual status under federal awards and the WR Act. The reasons for the first two requirements are reasonably obvious. Under the pre-WorkChoices regime, an entitlement to a minimum wage, paid annual and sick leave, regulation of working hours and, to a lesser degree, protection in the event of redundancies, were derived from federal awards. Hence, only workers covered by such awards could enjoy these benefits. In terms of data, the precise extent of federal award coverage under this regime was unclear.60 Nevertheless, it is evident that those unable to enjoy these entitlements because they were not covered by a federal award formed 55 WR Act (pre WorkChoices Act) s 170CM(2). 56 Termination, Change and Redundancy Case — Supplementary Decision (1984) 9 IR 115 at 137; (1985) 27 AILR 1: see also Termination, Change and Redundancy Case (1984) 8 IR 34 at 75. 57 Redundancy Pay Decision (2004) 134 IR 371: see Redundancy Pay Supplementary Decision (2004) 134 IR 57, App A for Termination and Redundancy Model Clauses. 58 WR Act (pre WorkChoices Act) s 170CE(5A). 59 This default period can be displaced if there is a written agreement prior to the commencement of the employment stipulating a different period. If it is a period longer than three months stipulated, such a period must also be reasonable having regard to the nature and circumstances of the employment: WR Act (pre WorkChoices Act) s 170CE(5B). For a case finding the absence of such an agreement see O’Hara v Victoria (2004) 133 IR 118 at 125. 60 The key survey providing information on the main methods of pay-setting in Australia is the ABS Employee Earnings and Hours survey (eg, Employee Earnings and Hours, Australia, Cat No 6306.0, March 2005. This survey is aimed, however, at discovering which legal instrument is most influential in determining a worker’s pay and conditions and not at whether a particular instrument applies.

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a significant portion of employees. For instance, in 2000 a Federal Government discussion paper estimated that around 49% of all employees were not covered by a federal award or statutory agreement.61 As with the requirement of a contract of employment, the minimum entitlements under SERs were only conferred upon employees at common law — that is, workers engaged pursuant to a contract of employment. This simply reflects the truism that the contract of employment forms the ‘cornerstone’ of Australian labour law.62 The requirement of an ongoing employment contract with a particular employer lasting more than a year stemmed, firstly, from the 12-month continuous service threshold that applied to paid annual leave, unpaid parental leave and redundancy pay.63 It also resulted from award and statutory exclusions of employees engaged on fixed-term/task contracts in relation to protection against dismissal. Under the pre-WorkChoices regime, fixed-term/task employees only enjoyed protection against discriminatory terminations and had no minimum entitlements to protection against unfair dismissal,64 notice prior to dismissal65 and protection in the event of redundancies.66 Performance of regular hours of work characterised an SER relationship because SER workers were assured regular hours of work under federal awards.67 It was also, arguably, a requirement of SER relationships through the concept of ‘continuous service’. This concept profoundly shaped the entitlement of a worker to the minimum entitlements of the SER under the pre-WorkChoices regimes, in particular, their right to notice prior to dismissal, redundancy pay and leave entitlements.68 It is clear from the main authorities that ‘continuous service’ requires an ongoing contractual engagement. These authorities also suggest that some regularity in terms of working hours is a requirement of ‘continuous service’.69 If so, workers performing irregular hours of work would have faced 61 Department of Employment, Workplace Relations and Small Business, Breaking the Gridlock: Towards a Simpler National Workplace Relations System, 2000, p 63. According to this paper 36.3% of all employees were covered by a state award or statutory agreement whereas 13.4% of all employees were ‘award free’ in the sense of not being covered by either a state or federal award/agreement. 62 B Creighton and R Mitchell, ‘The Contract of Employment in Australian Labour Law’ in L Betten (Ed), The Employment Contract in Transforming Labour Relations, Kluwer Law International, The Hague, 1995, pp 129, 136. 63 See text accompanying nn 52–54 above. 64 WR Act (pre WorkChoices Act) ss 170CBA(1)(a)–(b). The position of fixed-term/task employees is further compounded by the absence of a ‘termination of employment at the initiative of the employer’ or ‘dismissal’ when their contracts end upon the completion of the term or task: Victoria v Commonwealth (1996) 187 CLR 416 at 520; 138 ALR 129 at 173. This principle was applied in Manuel v Pasminco Cockle Creek Smelter Pty Ltd [1998] FCA 861 (unreported, von Doussa J, 7 July 1998, BC9804473) and D’Ortenzio v Telstra (1997) 78 IR 468. 65 WR Act (pre WorkChoices Act) ss 170CBA(1)(a)–(b); Termination, Change and Redundancy Case, Supplementary Decision (1984) 9 IR 115 at 120–1; (1985) 27 AILR 1. 66 WR Act (pre WorkChoices Act) ss 170CBA(1)(a)–(b); Redundancy Pay Decision (2004) 134 IR 371. 67 See text accompanying nn 30–32 above. 68 See text accompanying nn 52–59 above. 69 See Wire Workers Wire Fence & Tubular Gate Workers Union of Australia v Rylands Bros

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difficulties satisfying the requirement of ‘continuous service’ under the pre-WorkChoices regime. Non-casual status under federal awards and the WR Act was also a requirement for enjoying the minimum entitlements of the SER under the pre-WorkChoices regime owing to the express and implicit exclusions of workers considered to be casuals. With protection against dismissal, workers engaged as casuals under federal awards had neither an entitlement to notice70 nor any protection in the event of redundancies under these instruments.71 If a worker were found to be a ‘casual employee’ under the WR Act, they would also be denied a statutory entitlement to notice72 and statutory protection in the event of redundancies.73 A narrower exclusion applied to protection against unfair dismissal. Under the statutory unfair dismissal scheme, workers found to be ‘casual employees’ under the WR Act were denied protection unless they had been engaged by an employer on a regular and systematic basis for at least one year and had a reasonable expectation of further employment.74 Many casual workers were also denied award protection in the event of redundancy owing to the exemption relating to ‘ordinary and customary turnover of labour’. This exemption applied ‘where an employee is dismissed for reasons relating to his/her performance, or where termination is due to a normal feature of a business’75 and probably included the dismissals of workers paid the casual loading. For instance, Fisher P in the Crocker case,76 when elaborating upon this exemption, observed that: Many employees, particularly in the building construction, contracting and sub-contracting industries are employed on terms which contemplate intermittency in employment. Provisions for compensating for holidays and annual leave by making an allowance in the calculation of hourly or weekly rates of pay are often made . . . Payments on severance would appear to be inappropriate to these circumstances and may contain an element of double counting.77

While Fisher P did not expressly mention casual employees, his observations appear to be directed, among others, at employees who are paid a casual loading in lieu of holiday and annual leave entitlements. If so, the exemption relating to dismissals in the course of ‘ordinary and customary

70 71 72 73 74

75 76 77

(Aust) Pty Ltd (1944) 53 CAR 180 at 183; Re Metal Trades Award 1941 (1950) 69 CAR 108 at 110; Australian Journalists Association v Advertiser Newspapers Ltd (1981) 3 IR 144 at 148. Termination, Change and Redundancy Case (1984) 8 IR 34 at 256; Termination, Change and Redundancy Case, Supplementary Decision (1984) 9 IR 115 at 1; (1985) 27 AILR 1. Ibid. WRA (pre WorkChoices Act) ss 170CBA(1)(d) and 170CBA(7)(a). Ibid. WRA (pre WorkChoices Act) ss 170CBA(1)(d), 170CBA(3). It should be noted that s 170CBA(3A) provided that breaks of employment of less than three months are disregarded for the purpose of determining whether there has been one year of regular and systematic employment by an employer. Termination, Change & Redundancy Case — Supplementary Decision (1984) 9 IR 115 at 128; (1985) 27 AILR 1. Ibid. Shop, Distributive and Allied Employees’ Association (NSW) v Countdown Stores (1983) 7 IR 273 at 277.

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turnover of labour’ would have denied redundancy pay to workers who are paid the casual loading.78 The requirement of ‘continuous service’ would also mean that some casual workers lacked statutory and award protection against dismissal. As noted above, this particular requirement is met only when there is an ongoing contractual engagement.79 As a consequence, casual workers engaged on a series of contracts under the pre-WorkChoices regime80 would only have minimal ‘continuous service’ and thus would have been denied protection in the event of redundancy, being entitled only to the period of one week’s notice prior to dismissal. The requirement of ‘continuous service’ has a similar disentitling effect in relation to leave entitlements with a 12-month threshold of ‘continuous service’ for paid annual leave under federal awards and unpaid parental leave. Moreover, workers engaged as casuals under federal awards are expressly excluded from annual81 and personal leave.82 Similarly, Sch 14 of the WR Act excluded workers engaged as ‘casual employees’ under the Act from enjoying unpaid parental leave.83 A less absolute exclusion applied under federal awards. Under such awards, all workers engaged as ‘casual employees’ were denied unpaid parental leave except for ‘eligible casual employees’. Eligible casual employees were ‘casual employees’ who had been employed by a particular employer on a regular and systematic basis (whether on an ongoing basis or for several periods of employment) for at least 12 months and had a reasonable expectation of ongoing employment.84 The requirement of non-casual status under the pre-WorkChoices SERs is also confirmed by the lack of protection enjoyed by casual workers in relation to the regularity of their working hours. While workers engaged as casual employees under federal awards were entitled to penalty rates,85 there was no award requirement that such workers be guaranteed a regular pattern of work. The main way by which federal awards regulated the duration, scheduling and 78 For the sake of comprehensiveness, it should be noted that there have been AIRC decisions which have attempted to limit the breadth of this exemption in a somewhat ad-hoc basis. In Metals and Engineering Workers’ Union v Orford Pty Ltd [1991] 7 CAR 248; (1991) AILR 294 and Metals and Engineering Workers’ Union v Bundaberg Foundry Engineers Ltd [1991] 7 CAR 516; (1991) AILR 357, the AIRC ruled that terminations of employment due to shortage of work did not occur in the course of ‘ordinary and customary turnover of labour’ because of the dismissed workers’ length of service. For a Western AIRC decision in the same vein see Forest Products, Furnishing and Allied Industries IUW WA v Dancroft Holdings Pty Ltd t/a Concept Contract Interiors (1994) 36 AILR 348. 79 See text accompanying n 69 above. 80 Not all casual workers are engaged in such a manner, see J-C Tham, ‘Employment Security of Casual Employees: A Legal Perspective’ in M Barry and P Brosnan (Eds), Proceedings of the 17th AIRAANZ Conference: Refereed Papers, 2004, pp 516–24. 81 Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1995 cl 30.1; Metal Industry Award 1984 Pt 1 cl 7.1.1(c). 82 Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cll 31 (heading), 31.3.1; Metal, Engineering and Associated Industries Award 1998 Pt 1 cl 7.2. 83 This occurred by artificially excluding ‘casual employees’ from the definition of an ‘employee’: WR Act Sch 14 cl 2. 84 Parental Leave Casual Employees Decision (2001) EOC 93-144; 50 AILR 4-452. 85 Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1995 cl 15.2.2; Metal Industry Award 1984 Pt 1 cl 6.4.7–6.4.9.

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distribution of their working hours was through clauses requiring that they be paid for a minimum number of hours each time they are put to work.86 What emerges from the preceding discussion is that the assumption that SER workers are full-time employees is incorrect. While an ongoing contract of employment was necessary to access the minimum entitlements of SER under the pre-WorkChoices regime, this was not the case with full-time hours. For instance, the requirement of regular working hours could have been met by regular part-time workers. More importantly perhaps engagement under a contract of employment to perform full-time hours was not suffıcient for protection under this SER. There were other requirements that needed to be met before a worker enjoyed the minimum entitlements of this SER, namely, award coverage, continuous service of more than a year and non-casual status under federal awards and the WR Act. For example, a worker engaged as a casual employee under an award could have been a full-time employee on an ongoing contract and yet be denied paid annual and personal leave, protection in the event of redundancies and an entitlement to notice. In some cases, such a worker would not have enjoyed protection against unfair dismissal and an entitlement to unpaid parental leave.

Selective function of pre-WorkChoices SERs Under the pre-WorkChoices regime, an SER worker was a non-casual employee engaged on an ongoing contract by an employer for more than a year who is covered by an award.87 Hence, independent contractors, fixed-term/task employees and workers engaged as casuals under awards and/or the WR Act were non-SER workers under this regime. So too were employees engaged for less than a year by an employer and those not covered by federal awards. The following sections too examine how the formation of these non-SER engagements were regulated under the pre-WorkChoices regime and the minimum entitlements enjoyed by these workers. Regulation of the formation of non-SER engagements The formation of non-award engagements was perhaps the most regulated. Under the pre-WorkChoices regime, once covered by an award employers and employees could not opt out of the federal award system. Their relationship 86 The minimum prescribed varies according to the award. Most awards prescribe a minimum that applies to all working hours with the level set from two hours to four hours. A two-hour minimum applies to casual employees under the Health and Allied Services — Private Sector — Victoria Award 1998 cl 11.3 and the Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cl 15.2.4. Awards prescribing a three-hour minimum include the Commercial Sales (Victoria) Award 1999 cl 15.4.4; Clothing Trades Award 1999 cl 18.4 and the Horse Training Industry Award 1998 cl 10.5.9. Those prescribing a four-hour minimum include the Graphic Arts — General — Award 2000 cl 4.1.4(d); Laundry Industry (Victoria) Award 1998 cl 12.4; Storage Services — General — Award 1999 cl 13.4.1; Timber and Allied Industries Award 1999 cl 15.4.3 and the Transport Workers Award 1998 cl 12.5.3. Some awards do not even contain such clauses, eg, Rubber, Plastic and Cable Making Industry — General — Award 1998; Vehicle Industry Award 2000; Vehicle Industry — Repair, Services and Retail — Award 2002. 87 For elements of the standard employment relationship under German labour law, see Muckenberger, above n 17, p 389.

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would either be directly regulated by the award or underpinned by the award through the ‘no-disadvantage’ test. That said, however, it should be stressed that award coverage was partial88 and very much depended upon the ability of trade unions to ‘rope-in’ an employer into the award system.89 As with the other non-SER engagements, the main ways in which labour law could have regulated their formation was by defining the circumstances in which such engagements were permitted, restricting the length of such engagements or limiting the number or proportion of non-SER workers. With employees engaged less than a year by an employer, the regulation of their formation was very much determined by the inherent features of this form of employment with a natural limitation on the length of such engagement. Moreover, regulation could not really define or restrict the circumstances of their formation given that self-evidently all employees have to go through the phase of having less than a year of continuous service. In the case of independent contractors, fixed-term/task and casual employees, however, there were distinct weaknesses in the regulation of their formation by the pre-WorkChoices regime. It did not regulate the length of the period for which an independent contractor could be engaged. Neither was there regulation of the number of independent contractors in a workplace, either by the WR Act or federal awards. The latter situation resulted from the statutory prohibition against award provisions limiting the number or proportion of workers employed in a particular type of employment.90 The common law test of ‘employee’ did define the circumstances in which a worker could be engaged as an independent contractor by stipulating a range of considerations in determining whether a worker was an ‘employee’, the key factor being the degree of control the alleged employer had over the worker’s activities. Other factors included the supply of equipment by the worker and the ability of the worker to delegate the performance of work.91 There were, however, well-recognised ways to evade the characterisation of a dependent work relationship as one of employment at common law. The interposition of a legal entity between the worker and the hirer of labour was one such method. For example, a worker who supplied labour to another through a company would not have an employment relationship with the hirer of labour. Neither would the company since it was assumed that employees could only be natural persons.92 This was even when the company’s sole purpose was to function as a vehicle for the supply of the worker’s labour. Alternatively, the contours of the work relationship could be shaped in a way that meant it did not satisfy the various indicia of employment. For instance, a party with stronger bargaining power could engage a worker under a contract requiring the worker to supply his or her own equipment and formally leaving the worker free to delegate the performance of work. Workers who were economically dependent on the hirer of labour would not, however, avail themselves of this formal freedom to delegate because of the 88 89 90 91

See text accompanying n 61 above. See generally Creighton and Stewart, above n 16, pp 169–72. WR Act (pre WorkChoices Act) s 89A(4)(a). Stevens v Brodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16; 63 ALR 513 and Hollis v Vabu Pty Ltd (2001) 207 CLR 21; 181 ALR 263; 75 ALJR 1356. 92 See Australian Mutual Provident Society Ltd v Chaplin (1978) 18 ALR 385 at 389–90.

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need for income. In such circumstances, the hirer of labour was able to secure the supply of labour through a dependent work relationship while avoiding the characterisation of such a relationship as one of employment.93 With fixed-term/task employees, neither the WR Act nor federal awards94 restricted the number or proportion of such employees in a workplace or the length of their engagement. Very much the same applied in relation to regulation of the circumstances in which such employment was formed. The Act did, however, stipulate that fixed-term/task employees, even though nominally caught by the exclusion of employees engaged on a contract for a specified period/task, could still access the statutory unfair dismissal scheme if they could demonstrate that a substantial or main purpose of the engagement under such a contract was to avoid the employer’s obligations under these schemes.95 The ability of fixed-term/task employees to invoke this provision was clearly impeded by problems of proof.96 In relation to casual employees, there was no regulation of the number or proportion of such employees in a workplace under statute or federal awards.97 Moreover, most federal awards did not regulate the maximum length of casual engagements. A number of awards did, however, provide for weak regulation through conversion clauses. In some — most notably, the federal Metal Trades award98 — workers engaged as casual employees by a particular employer for a period of six months on a regular or systematic basis could elect to convert to either full-time or regular part-time employment. Such a right was highly qualified, with the employer able to refuse on reasonable grounds.99 93 See A Stewart, ‘Redefining Employment? Meeting the Challenge of Contract and Agency Labour’ (2002) 15 AJLL 235. 94 See, eg, Metal, Engineering and Associated Industries Award 1998 Pt 1 cl 4.2.5. 95 WRA (pre WorkChoices Act) s 170CBA(2). 96 A Stewart, ‘And (Industrial) Justice for All? Protecting Workers Against Unfair Dismissal’ (1995) 1 Flinders Jnl of Law Reform 85 at 111. 97 This was due to the prohibition against award provisions limiting the number or proportion of workers employed in a particular type of employment: WR Act (pre WorkChoices Act) s 89A(4)(a). 98 Metal Industry Award 1984 Pt 1 cl 4.2.3. The Full Bench of the AIRC decided to insert this conversion clause in Metals Casual Award Case (2000) 110 IR 247. For discussion of this decision, see R Owens, ‘The “Long-term or Permanent Casual” — An Oxymoron or “a well enough understood Australianism” in the Law?’ (2001) 27(2) Australian Bulletin of Labour 11 at 121–2. The Full Bench of the AIRC settled on the details of the conversion clause in Re Metal, Engineering and Associated Industries Award 1998 — Pt I (unreported, PR901028, Munro J, Polities SDP and Lawson C, 9 February 2001). Other federal awards that have adopted similar provisions include, eg, Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cl 15.2.5; Rubber, Plastic and Cable Making Industry — General — Award 1998 paras 15.3.2–15.3.16. See also Re Queensland Local Government Offıcers’ Award 1998 (unreported, AIRC, Bacon C, 29 March 2005, PR956841) and Re Food Preservers’ Award 2000 and Confectioners Award 2002 (unreported, AIRC, Cargill C, 29 March 2005, PR956836). 99 Federal awards tended to leave the question of reasonable grounds at large. One exception is the federal Hospitality Industry Award which states that an employer in considering an election to convert may have regard to: the size and needs of the workplace or enterprise; the nature of the work the employee has been doing; the qualifications, skills, and training of the employee; the trading patterns of the workplace or enterprise (including cyclical and seasonal trading demand factors); the employee’s personal circumstances, including any family responsibilities; and any other relevant matter (Hospitality Industry —

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It was also a ‘right’ that many casual employees may have been disinclined to exercise because of the unequal bargaining position that they found themselves in.100 Such considerations have prompted some commentators to criticise the conversion clauses for relying upon ‘(a)n individualised . . . approach, reliant on action by insecure casuals’.101 These criticisms would appear to be vindicated by anecdotal evidence that conversion clauses had been infrequently invoked.102 Turning to the circumstances in which a worker would be considered a ‘casual employee’ under provisions conferring minimum entitlements, this very much depended upon award and statutory definitions of ‘casual employee’. The overwhelming majority of federal awards adopted an expansive definition that stipulated that a ‘casual employee’ was one ‘engaged as such’103 or ‘engaged and paid as such’.104 Such a definition principally relied upon the designation placed by the parties on their employment relationship and whether or not the casual loading was paid. The breadth of this definition was, however, tempered by a prohibition against engaging and re-engaging casual employees in order to avoid award obligations.105 The position was more mixed in relation to the exclusions of ‘casual employees’ from protection against unfair dismissal, entitlement to notice and protection in the event of redundancies under the WR Act. In essence, there were three competing approaches to the meaning of ‘casual employees’ as found in this legislation. There was, firstly, the award-designation approach — that is, an approach that would consider workers to be ‘casual employees’ under the Act if they were designated as a casual employee under an award. Such designation would entail the worker being covered by an award and being typically paid a casual loading and not being entitled to paid annual or sick leave.106 Second, there was the parties-designation approach. Under this approach, a worker would be a ‘casual employee’ under the federal unfair dismissal scheme if the parties considered the engagement to be ‘casual’ (whether under an award or otherwise).107 Third, there was the approach

100 101 102

103 104 105 106 107

Accommodation, Hotels, Resorts and Gaming Award 1998 cl 15.2.6(b)). See also Clerks (SA) Award — Report to Full Commission [2002] SAIRComm 23 (unreported, Commissioner AJ Dangerfield, 30 April 2002) at [120] for an enumeration of ‘more typical employer objections’. R Owens, ‘Decent Work for the Contingent Workforce in the New Economy’ (2002) 15(3) AJLL 209 at 226–7. B Pocock, J Buchanan and I Campbell, Securing Quality Employment: Policy Options for Casual and Part-time Workers in Australia, 2004, p 49. Ibid. See also B Pocock, J Buchanan and I Campbell, ‘“New” Industrial Relations: Meeting the Challenge of Casual Work in Australia’ in New Economies: New Industrial Relations: Proceedings of the 18th AIRAANZ Conference: Volume 2: Un-Refereed Abstracts & Papers, 2004, p 208 at p 214. See, eg, Hospitality Industry — Accommodation, Hotels, Resorts and Gaming Award 1998 cl 15.2.1. Ibid, cl 15.2.11; see also, eg, Metal, Engineering and Associated Industries Award 1998 Pt 1 cl 4.2.3(a). Metal, Engineering and Associated Industries Award 1998 Pt 1 cl 4.2.3(e). The key authorities exemplifying this approach are Graham v Blue Suits Pty Ltd t/a Toongabbie Hotel (1999) 101 IR 28 and Nightingale v Little Legends Childcare (2004) 134 IR 111. This approach was evident in the Full Bench of the AIRC’s decision in Xu v Skilled

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originating from Moore J’s decision in Reed v Blue Line Cruises Ltd.108 Under this approach, designation by the parties or under an award was not determinative.109 Rather, the focus was on the specifics of the employment arrangements and whether they met the conditions of ‘informality, irregularity and uncertainty’.110 These three competing approaches reflected the ‘see-saw between contractionist and expansionist readings’111 of the term ‘casual employee’ and very much shaped the conditions in which a worker would be considered a casual employee under the WR Act. Minimum entitlements of non-SER workers The minimum entitlements of non-SER workers are significant not only because they directly affect such workers but also because they will determine the gap between their protection and that enjoyed by SER workers. As noted earlier, this gap will determine the precariousness of non-SER workers and also shape the incentives employers have to use non-SER workers.112 Table 1 sets out the minimum entitlements that various groups of workers had under the pre-WorkChoices regime with respect to the minimum wage, protection against dismissal, regulation of hours and leave entitlements.

108 109 110

111 112

Engineering Ltd (unreported, AIRC, Watson SDP, Duncan DP, Hingley C, 26 May 1998) at 3. In this case, the Full Bench found that the worker in question was a ‘casual employee’ within the meaning of reg 30B(1)(d) of the Workplace Relations Regulations having regard to the fact that the worker was specified as a casual employee in her pay advice and her taxation employment declaration form and her payment as a casual worker under the award. (1996) 73 IR 420. The Reed approach was also adopted by the Full Bench of the AIRC in Cetin v Ripon Pty Ltd t/as Parkview Hotel (2003) 127 IR 205. See also Uzcateguigayman v Hospitality Horizons (1997) 75 IR 206. While the Full Bench of the Federal Court in Hamzy (Hamzy v Tricon International Restaurants trading as KFC (2001) 115 FCR 78; 111 IR 198 at [38]) did not explicitly endorse the Reed approach, its statement that ‘[t]he essence of casualness is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work’ is, however, consistent with Reed in that it would seem to capture the elements of informality and uncertainty. Justice P R Munro, ‘Pertaining to relations between employers and employees: who decides about an employment relationship, and why?’, Paper presented at the Industrial Relations Society of Queensland Annual State Conference, Brisbane, 23 July 2004, p 27. For a discussion of relative advantages and disadvantages of engaging casual employees, see Campbell, above n 18, at 78–93.

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Table 1: Minimum entitlements of SER and non-SER workers under pre-WorkChoices regime Non-SER workers Employees SER Independ- Workers Casual Fixedemployees ent not employees term/ with less task than one contract- covered ors by an employees year of award continuous service Entitlement to a minimum wage

Yes

No

No

Yes if covered by federal award

Yes if covered by federal award

Yes if covered by federal award

Protection against unfair dismissal

Yes

No

Depends

Depends

No

Generally yes if length service more than three months

Protection against discriminatory dismissals

Yes

Yes

Yes

Yes

Yes

Yes

Entitlement to notice

Yes

Possibly Depends through unfair contracts provisions113

No under No awards Possibly under WR Act

Entitled to one week’s notice

Protection in the event of redundancies

Yes

No

No under No awards Possibly under WR Act

No under awards Possibly under WR Act

Depends

113 WR Act (pre WorkChoices Act) ss 127A–B. Some decisions under this jurisdiction that have found contracts allowing the hirer of labour to terminate with no or little notice to be unfair when there has been heavy capital investment by the independent contractor which sometimes has been accompanied by express assurance of ongoing work: see, eg, Re TWU (1993) 50 IR 171; Papa v Finemores Pty Ltd (1995) 37 AILR 3-003; TWU v Busfreight Pty Ltd (1995) 37 AILR 3-003 (contra when there is no heavy capital investment: Burgess v Huntsman Chemicals Pty Ltd (2003) AILR 300-030).

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Regularity of working hours

Yes

No

No

No

Yes

Yes

Maximum hours

Weak No regulation

No

No

Weak Weak regulation regulation

Scheduling of hours

Yes

No

No

No

Yes

Yes

Annual leave

Yes

No

No

No

Yes

No

Personal leave Yes (including carer’s leave) Parental leave Yes

No

No

No

Yes

Yes

No

Depends

Depends

Yes

No

What Table 1 demonstrates is that the gap in minimum entitlements was widest between SER workers and independent contractors. Independent contractors did not enjoy any minimum entitlements except for protection against discriminatory dismissals and possibly a right to notice through the unfair contracts jurisdictions. When the minimum entitlements of SER workers under the pre-WorkChoices regime are compared with those of other non-SER workers, a quite complex picture emerges. The minimum entitlements of non-award employees were clearly inferior in terms of their lack of entitlement to a minimum wage, regulation of working hours and paid annual and personal leave. On other counts of protection, however, the gap depended on the circumstances of the particular non-award employees. The minimum entitlements of casual employees are poor when compared to those of SER workers with respect to regulation of working hours and paid annual and personal leave. For many casual employees under the pre-WorkChoices regime, they were also denied an entitlement to notice prior to dismissal, protection against unfair termination and protection in the event of redundancies. On the other hand, for those covered by federal award, they would have been entitled to the casual loading. The gap between the minimum entitlements of fixed-term/task employees and SER workers under the pre-WorkChoices regime was principally due to the inferior protection against termination enjoyed by fixed-term/task employees. These workers did not enjoy any protection against unfair dismissal, an entitlement to notice prior to dismissal or protection in the event of redundancies. When the minimum entitlements of SER workers and employees with less than a year of continuous service are compared, it can be seen that the latter group was provided poorer protection because they were denied paid annual leave or unpaid parental leave. Moreover, such workers would likely have had either no or inferior protection against unfair dismissal, entitlement to notice and protection in the event of redundancies. Table 2 summarises the preceding discussion.

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Table 2: Differences in minimum entitlements of SER and non-SER workers under pre-WorkChoices regime Minimum entitlements of SER workers compared with those of:

Minimum entitlements not enjoyed by non-SER workers

Independent Contractors

All except for protection against discriminatory dismissals and possibly an entitlement to notice through the unfair contracts jurisdictions

Workers not covered by awards

Entitlement to a minimum wage; Regulation of working hours; Paid annual and personal leave (including carer’s leave)

Casual employees

Regulation of working hours; Paid annual and personal leave (including carer’s leave); Many denied an entitlement to notice prior to dismissal, protection against unfair dismissal and protection in the event of redundancies. Note those covered by a federal award, entitled to the casual loading.

Fixed-term/task employees/col>

Protection against unfair dismissal; Entitlement to notice prior to dismissal; Protection in the event of redundancies.

Employees with less than one year of continuous service

Paid annual leave; Unpaid parental leave; Likely to have inferior or no protection against unfair dismissal, entitlement to notice and protection in the event of redundancies.

Standard Employment Relationships under Post-WorkChoices Regulatory Framework Minimum entitlements The WorkChoices legislation has profoundly altered the regulatory framework relating to minimum entitlements. Most importantly, despite the Act stating that federal awards are meant to provide ‘minimum safety net entitlements’,114 it is clear that they no longer genuinely provide for minimum entitlements because of the abolition of the ‘no disadvantage’ test. Post-WorkChoices, workplace agreements generally need only to comply with the provisions of 114 WR Act (post WorkChoices Act) s 510(a).

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the Australian Fair Pay and Conditions Standard (AFPCS) even though the effect of these agreements is to displace federal awards.115 The Act does make provisions for ‘protected’ award conditions, namely, provisions of existing awards dealing with various matters including overtime and penalty rates, public holiday rates and annual leave loadings.116 However, these provisions are only protected in the sense that they continue to apply unless specifically excluded by the agreement.117 Exclusion can easily be achieved (in a context of workers with poor bargaining power) through the use of pro-forma paragraphs. Indeed, the Employment Advocate Peter McIlwain, conceded that this could even be done by an appropriately drafted ‘single sentence’.118 Not surprisingly, an analysis by the Office of the Employment Advocate of a sample of 250 AWAs lodged in April 2006 found that all of them removed at least one ‘protected award condition’119 while 16% removed every such condition.120 As a result of the WorkChoices Act, the AFPCS now lays down minimum standards that form the floor under which agreements cannot fall. Its’ provisions prevail over terms of any statutory agreement (described as ‘workplace agreements’ under the Act) or contract of employment that provides a less favourable outcome for the employee in a particular respect.121 Moreover, a term of such an agreement or contract has no effect if it purports to exclude provisions of the AFPCS.122 The upshot is that under the post-WorkChoices regime minimum entitlements are largely found in the AFPCS. The AFPCS deals with five matters. It provides an entitlement to a minimum wage (including casual loadings).123 In relation to leave entitlements, the AFPCS sets a minimum of four weeks of annual leave,124 10 days of personal leave per annum125 and 12 months of unpaid parental leave.126 With respect to regulation of hours, AFPCS provides for maximum ordinary hours.127 The Act also has provisions dealing with meal breaks128 and public holidays.129 Moreover, in the area of protection against dismissal, the Act 115 WR Act (post WorkChoices Act) s 349. For discussion, see A Forsyth and C Sutherland, ‘Collective Labour Relations Under Siege: The WorkChoices Legislation and Collective Bargaining’ (2006) 19 AJLL 183 at 190–1. 116 WR Act (post WorkChoices Act) s 354(4). 117 For discussion of ‘protected’ award conditions in relation to AWAs, see J Fetter, ‘WorkChoices and Australian Workplace Agreements’ (2006) 19 AJLL 210 at 217–19. 118 Evidence to Senate Committee on Employment, Workplace Relations and Education, Parliament of Australia, Canberra, 29 May 2006 (Peter McIlwain, Employment Advocate), p 138. 119 Ibid. 120 Ibid. 121 WR Act (post WorkChoices Act) s 172(2). 122 Ibid, s 173. 123 Ibid, ss 182–188, 189–193. 124 Ibid, ss 227–237. 125 Ibid, ss 239–261. 126 Ibid, ss 262–316. 127 Ibid, ss 223–226. 128 Ibid, ss 607–610. 129 Ibid, ss 611–619.

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considers as part of the ‘(m)inimum entitlements of employees’130 protection against unfair dismissal,131 protection against unlawful dismissals132 and an entitlement to notice prior to termination.133 This includes the power (exercisable by the AIRC) to make an order for consultation in some situations involving redundancies.134

Protective function of post-WorkChoices SERs Although provided under different instruments, the minimum leave entitlements pre and post-WorkChoices are similar in content. In the pre-WorkChoices regime, annual, personal and parental leave were provided under federal awards. With the passage of the WorkChoices Act, federal awards can no longer deal with these matters because they are provided for under the AFPCS.135 The AFPCS does, in this regard, provide for minimum entitlements comparable to those provided by standard federal awards under the pre-WorkChoices regime. In fact, the AFPCS provides for annual leave that is more generous that the minimum annual leave entitlement under federal awards. Under these awards, annual leave was available only after an employee had served 12 months of continuous service.136 By contrast under the AFPCS annual leave accrues for each completed four-week period of continuous service with an employer.137 Further, under the AFPCS all of a worker’s entitlement to paid personal leave can be used as carer’s leave.138 There is also some continuity in terms of the protection against termination in that the post-WorkChoices regime, like its predecessor, provides for protection against discriminatory dismissals and a right to notice as minimum entitlements.139 There is, however, a distinct reduction of protection in certain other respects. There is no longer any statutory entitlement to protection in the event of redundancies. While the AIRC can still make orders for consultation in some redundancy situations,140 it no longer has statutory power to make orders in relation to redundancy pay.141 More importantly, award provisions dealing with redundancy pay and notification etc in the event of redundancies no longer provide minimum entitlements given the abolition of the ‘no-disadvantage’ test.142 Similarly access to protection against unfair termination is now severely restricted. The post-WorkChoices regime maintains the previous exclusions and extends it in the case of the ‘qualifying 130 131 132 133 134 135 136 137 138 139 140 141 142

The heading of Pt 12 of WR Act (post WorkChoices Act). WR Act (post WorkChoices Act) s 643(1)(a). Ibid, ss 643(1)(b), 659. Ibid, ss 643(1)(b), 661. Ibid, ss 668–671. Ibid, s 516. See text accompanying n 52 above. WR Act (post WorkChoices Act) s 232(2). Ibid, s 249. For the position pre-WorkChoices, see text accompanying n 39 above. See text accompanying nn 24–26 above. WR Act (post WorkChoices Act) ss 668–671. See text accompanying n 28 above. Moreover, existing federal awards must be ‘simplified’ so as not to include non-allowable award matters: WR Act (post WorkChoices Act) s 547. Non-allowable award matters include provisions dealing with redundancy pay for employees engaged by an employer of fewer than 15 employees (see s 513(4)).

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period of employment’ exclusion. The default period under this exclusion is now six months rather than three months143 with the effect that employees with continuous service of six months or less will be typically denied protection against unfair dismissal. Two broad exclusions have been added to the statutory unfair termination scheme. Applications can no longer be made on grounds including termination for genuine ‘operational reasons’.144 Neither can applications be made by employees engaged by an employer that employed 100 or fewer employees at the time of termination.145 Hence, despite the Act considering protection against dismissal as a ‘minimum entitlement’, Chapman’s description of it as a ‘legal privilege’ is rather closer to the mark.146 Moreover, it is a legal privilege that a worker cannot make the subject of bargaining. Part of the ‘command and control’ regulation of the post-WorkChoices regime147 is an injunction against inserting ‘prohibited content’ into workplace agreements. Not only is a term that contains such content void but an employer that lodges a workplace agreement reckless as to whether it contains ‘prohibited content’ commits an offence under the Act.148 Regulations have now been passed that deem terms that ‘confer a right or remedy in relation to the termination of employment of an employee bound by the agreement for a reason that is harsh, unjust or unreasonable’ to be ‘prohibited content’.149 As a result of the WorkChoices Act, the protection afforded to SER workers in relation to their working hours has also diminished. Under the previous regime, SER workers were assured regular hours by awards. Awards also weakly regulated maximum hours and non-standard hours through the obligation to work reasonable overtime and overtime, penalty and public holiday rates.150 Post-WorkChoices, however, such award regulation no longer forms part of the framework of minimum entitlements. In its place, there are the AFPCS provisions relating to maximum ordinary hours of work. These provisions essentially replicate the weak award regulation of maximum hours of work. Thirty eight hours per week is set as 143 WR Act (post WorkChoices Act) ss 643(6)–(7). 144 Ibid, s 643(8). Section 643(9) of the Act defines this phrase quite broadly to mean ‘reasons for an economic, technological, structural or similar nature relating to the employer’s undertaking, establishment, service or business, or to a part of the employer’s undertaking, establishment, service or business’. AIRC decisions that have rejected unfair termination applications because of this exclusion include Koya v Port Phillip City Council (unreported, AIRC, Ives DP, 13 June 2006, PR973045); Provic v Bilfinger Berger Services (Australia) Pty Ltd (unreported, AIRC, Commissioner Cargill, 14 August 2006, PR973542); Cruikshank v Priceline Pty Ltd (unreported, AIRC, Commissioner Eames, 17 April 2007, PR976793); Duncan v Altshul Printers Pty Ltd (unreported, AIRC, Commissioner Lewin, 19 April 2007, PR976767) (contra Perry v Savills (Vic) Pty Ltd (unreported, AIRC, Senior Deputy President Watson, 20 June 2006, PR973103). 145 WR Act (post WorkChoices Act) ss 643(10). 146 A Chapman, ‘Unfair Dismissal Law and WorkChoices: From Safety Net Standard to Legal Privilege’ (2006) 16 Economic and Labour Relations Rev 237. See also M Pittard, ‘Back to the Future: Unjust Termination of Employment under the WorkChoices Legislation’ (2006) 19 AJLL 225. 147 See generally S Cooney, ‘Command and Control in the Workplace: Agreement-making under WorkChoices’ (2006) 16 Economic and Labour Relations Rev 147. 148 WR Act (post WorkChoices Act) ss 357–358. 149 Workplace Relations Regulations 2006 (Cth) reg 8.5(5). 150 See text accompanying nn 33–36 above.

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a prima facie maximum. It is prima facie, firstly, because hours of work can be averaged over a period of 12 months and also because employees can be required to work reasonable additional hours.151 The WR Act provides a right to public holidays only in the sense that an employee is able to refuse on reasonable grounds to work such days.152 While an entitlement to public holiday rates is one of the factors in determining whether a refusal to work on public holidays is on reasonable grounds, there is no guarantee to such rates.153 In sum, the minimum entitlements of SER workers in relation to working hours has been undermined by the WorkChoices Act, such workers no longer having any entitlement to regularity of working hours and overtime, penalty and public holiday rates. The following table details the differences in the minimum entitlements enjoyed by SER workers pre and post-WorkChoices. Table 3: Minimum entitlements of SER workers pre and post-WorkChoices Pre-WorkChoices regime

Post-WorkChoices regime

Entitlement to a minimum wage

Entitlement to a minimum wage

Protection against unfair dismissal

Protection against unfair dismissal

Entitlement to notice

Entitlement to notice

Protection against discriminatory dismissals

Protection against discriminatory dismissals

Annual, personal (including carer’s leave) and parental leave

Annual, personal (including carer’s leave) and parental leave

Weak regulation of maximum hours

Weak regulation of maximum hours

Protection in the event of redundancies Regularity of working hours Overtime, penalty and public holiday rates

What then are the conditions that must be met before an employment relationship secures the protection of minimum entitlements post-WorkChoices? Key features of SER under the current regime are identical to those under the pre-WorkChoices framework, namely: • engagement pursuant to a contract of employment; 151 WR Act (post WorkChoices Act) s 226. 152 WR Act (post WorkChoices Act) ss 612–613. For a helpful discussion of this provision, see S Cooney, J Howe and J Murray, ‘Time and Money under WorkChoices: Understanding the New WRA as a Scheme of Regulation’ (2006) 29 UNSWLJ 215 at 233. 153 WR Act (post WorkChoices Act) ss 613(f).

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• performance of regular hours of work; • an ongoing contract with an employer of at least 12 months; and • non-casual status under Act. A contract of employment is still a cornerstone of the WR Act, with minimum entitlements typically conferred only upon employees at law. Performance of regular hours of work continues as a condition of SER because the concept of ‘continuous service’ still shapes the entitlement of a worker to entitlement to notice and leave entitlements.154 An ongoing employment contract remains a prerequisite for accessing these minimum entitlements because of the continuing exclusions of employees engaged on contracts for a specified period/task from protection against unfair termination and entitlement to notice.155 Further, this prerequisite has been strengthened through the additional exclusion of employees ‘engaged on a seasonal basis’.156 The latter exclusion would capture many fixed-term employees as the Act defines employees ‘engaged on a seasonal basis’ as workers engaged to ‘perform work for the duration of a specified season’ which could include periods of festivities and seasons of year (as determined by weather conditions).157 The requirement that the ongoing contract of least 12 months persists as a feature of SER relationships because of the eligibility requirement for unpaid parental leave.158 Arguably however there is less emphasis on the length of continuous service under the post-WorkChoices regime. It is true, of course, that the importance of this dimension of working arrangements has increased in relation to protection against unfair dismissal owing to the default period under the ‘qualifying period of employment’ exclusion increasing from three months to six months.159 Two other changes, though, have decreased the importance of such service. Rather than requiring that an employee have 12 months of continuous service before being able to enjoy paid annual leave, the AFPCS now allows such leave to accrue after each four months of completed service.160 Further, there is also less emphasis on the length of service post-WorkChoices because redundancy pay, which was previously calibrated according to length of service, is no longer an entitlement. These last two developments may well mean that long-serving employees enjoy a less privileged position under the post-WorkChoices framework of minimum entitlements. Non-casual status under the WR Act remains a requirement for enjoying minimum entitlements under the SER due to the continuing exclusion of ‘casual employees engaged for a short period’ from protection against unfair dismissal and entitlement to notice.161 Similarly, workers considered ‘casual 154 WR Act (post WorkChoices Act) ss 228, 232 (annual leave), 240, 246(2) (personal leave), 263, 265(2) (parental leave), 661 (notice prior to dismissal). 155 Ibid, s 638(1)(a)–(b). 156 Ibid, s 638(1)(g). 157 Ibid, s 638(8)–(9). 158 Ibid, s 265(2)(b)(i). 159 See text accompanying n 143 above. 160 See text accompanying n 136–137 above. 161 WR Act (post WorkChoices Act) ss 638(1)(d).

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employees’ under the Act are also denied paid annual162 and personal leave.163 It should be noted, however, the WorkChoices Act has tempered the exclusion of ‘casual employees’ from statutory provisions relating to unpaid parental leave. Instead of completely denying ‘casual employees’ such leave, the AFPCS provisions have drawn upon the standard award clauses and extended the entitlement to unpaid parental leave to ‘eligible casual employees’, namely, ‘casual employees’ engaged for at least 12 months on a regular and systematic basis by an employer who have a reasonable expectation of continuing engagement.164 These continuities in terms of the features of SER mean that under the post-WorkChoices regime, the elements of conventional understandings of ‘permanent’ or ‘standard’ employment (full-time work pursuant to an ongoing contract) are neither necessary nor sufficient for a worker to enjoy the minimum entitlements of the SER. The WorkChoices Act has also meant changes to key features of SER under the WR Act. Award coverage is no longer a condition for enjoying minimum entitlements under these relationships. Engagement by a constitutional corporation has taken the place of this requirement because the Act and, in particular, AFPCS165 and protection against termination,166 generally only apply to employees engaged by constitutional corporations.167 If protection against unfair termination is considered part of the framework of minimum entitlements then an additional requirement for a SER engagement is employment by a firm employing more than 100 employees.168 Table 4 identifies the features of SER under the pre and post-WorkChoices regimes. Table 4: Features of SER under pre and post-WorkChoices regimes SER under pre-WorkChoices regime

SER under post-WorkChoices regime

Contract of employment

Contract of employment

Ongoing contract with an employer of at Ongoing contract with an employer of at least 12 months least 12 months Non-casual status under awards and/or WR Act

162 163 164 165

Non-casual status under WR Act

Ibid, s 227. Ibid, s 239(1). Ibid, ss 262, 264. Under ss 5 and 6 of the WRA, an ‘employee’ typically means an employee engaged by a constitutional corporation. 166 Again this is due to the confined meaning given to ‘employee’ under s 636 of the WRA (post WorkChoices Act) dealing with protection against termination: WRA. 167 There are two main exceptions to this general position, namely, Victorian employees (WR Act (post WorkChoices Act) ss 861–863, 877, 879–890) and the entitlement to unpaid parental leave (s 689). 168 Again this is due to the restricted meaning given to ‘employee’ under provisions dealing with protection against termination: WR Act (post WorkChoices Act) s 643(10).

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Performance of regular hours of work

Performance of regular hours of work

Award coverage

Engagement by a constitutional corporation Engagement by an employer employing more than 100 employees

Selective function of post-WorkChoices SERs Regulation of formation of non-SER engagements There are continuities in this area with the regulation of the formation of fixed-term/task employment and employment of less than 12 months treated very much in the same way as under the pre-WorkChoices regime.169 The requirement that a worker be engaged by a constitutional corporation (as opposed to being covered by a federal award) will, however, decrease the scope for engaging non-SER workers under the post-WorkChoices regime. As noted earlier, federal award coverage under the pre-WorkChoices regime was estimated to be around 49% of all employees.170 Government estimates of workers engaged by constitutional corporations, on the other hand, places it at 85% of all employees.171 Basing federal minimum entitlements upon s 51(xx) of the Constitution, of course, raises the possibility that employers might conduct their businesses as non-constitutional corporations so as to avoid the costs of these entitlements. This is a rather slim possibility for two reasons. First, if incorporated a business is unlikely to be able to escape characterisation as a ‘constitutional corporation’. The current approach is based on the activities of the entity and as long as a substantial proportion of the activities of the entity are trading in character then it will be considered a ‘trading corporation’ within the meaning of s 51(xx).172 Second, it is hard to see what incentive a business seeking to lower labour costs would have to conduct its activities as a non-constitutional corporation. Being a constitutional corporation has the advantage of generally excluding state and territory industrial laws and awards that presently provide 169 See text accompanying above nn 89, 94–96 above. 170 See text accompanying n 61 above. 171 Commonwealth Government, A New Workplace Relations System: A Plan for a Modern Workplace, 2005, p 5. 172 R v Federal Court of Australia; Ex parte WA National Football League (1979) 143 CLR 190; 23 ALR 439; Commonwealth v Tasmania (1983) 158 CLR 1; 46 ALR 625. See A Stewart, ‘Federal Labour Law and New Uses for the Corporations Power’ (2001) 14 AJLL 145; W Ford, ‘The Corporatisation of Australian Labour Law: Completing Howard’s Unfinished Business’ (2006) 19 AJLL 144; S Evans, C Fenwick, C Saunders, J-C Tham and M Donaldson, Work Choices: The High Court Challenge, Thomson Lawbook Co, Sydney, 2007, pp 56-9. On s 51(xx) of the Commonwealth Constitution, see generally G Williams, Labour Law & the Constitution, Federation Press, Sydney, 1998, Ch 4. For a recent superior court decision determining the issue whether an employer is a constitutional corporation, see EDUCANG Ltd v Queensland Industrial Relations Commission and Queensland Independent Education Union of Employees (unreported, Industrial Court of Queensland, President Hall, 10 July 2006, C/2006/35). See also Allan v Lifeline Newcastle and Hunter (unreported, AIRC, Larkin C, 11 September 2006, PR973887).

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for more stringent labour protection.173 While the move from basing minimum entitlements on award coverage to employment by a constitutional corporation is likely to result in less opportunity to engage non-SER workers, other changes effected by the WorkChoices Act have the opposite effect. In the case of independent contractors, the established ways to avoid the characterisation of working arrangements as one of employment remain.174 Indeed, there will be greater scope for engaging independent contractors post-WorkChoices because ‘restrictions on the engagement of independent contractors’175 cannot be included in workplace agreements as they are deemed to be ‘prohibited content’.176 The weak regulation of the engagement of casuals through casual conversion clauses no longer applies, firstly because federal awards no longer lay down minimum entitlements and, secondly because these awards cannot provide for such clauses.177 As minimum entitlements are conferred by the WR Act, whether a worker is engaged as a ‘casual employee’ will depend upon the meaning given to this statutory phrase. Despite using this phrase repeatedly,178 nowhere does the Act define it. In consequence the meaning of the phrase then very much depends upon the approach taken by the AIRC and courts. If they adopt the Reed approach, there will be much less opportunity to avoid minimum entitlements through engagements of ‘casuals’. If, on the other hand, the award-designation or parties-designation approach is adopted, there will be much more room to exclude these entitlements.179 Minimum entitlements of non-SER workers Table 5 sets out the minimum entitlements of SER and non-SER workers under the post-WorkChoices regime while Table 6 details the differences in terms of the minimum entitlements enjoyed by SER and non-SER workers.

173 WR Act (post WorkChoices Act) s 16. State and territory anti-discrimination statutes are not included in this exclusion: ibid, s 16(2). 174 See text accompanying nn 87–88 above. The Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006 (Cth) bans so-called ‘sham arrangements’: ibid, proposed Pt 22 of WR Act (post WorkChoices Act). See generally Parliament of Australia, Senate Employment, Workplace Relations and Education Legislation Committee, Provisions of the Independent Contractors Bill 2006 and the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006, 2006. 175 Workplace Relations Regulations 2006 (Cth) reg 8.5(i). 176 WR Act (post WorkChoices Act) s 358. 177 Ibid, s 515(1)(b). 178 See, eg, WR Act (post WorkChoices Act) ss 210 (casual loading), 227 (annual leave), 239 (personal leave), 264 (parental leave), 638 (protection against dismissal). 179 See text accompanying nn 106–111 above.

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Table 5: Minimum entitlements of SER and non-SER workers under post-WorkChoices regime SER workers

Non-SER workers FixedEmployees Independ- Workers Casual ent not employees term/ with less task than one contract- employed employees year of ors by an con continuous service corps

Entitlement to a minimum wage

Yes

No

Protection against unfair dismissal

Yes

No

Depends

No

Depends

Protection against discriminatory dismissals

Yes

Yes

Yes

Yes

Yes

Entitlement to notice

Yes

Possibly through unfair contracts provisions180

No if No ‘casual employee’ under WR Act

Entitled to one week’s notice

Protection in the event of redundancies

Generally No no

No

No

No

Regularity of working hours

No

No

No

No

Maximum hours

Weak No regulation

No

Depends on content of state and territory industrial laws and awards

Yes if Yes if Yes if engaged engaged engaged by by by constitute- constitute- constituteional ional ional corporat- corporat- corporation ion ion

Weak Weak Weak regulation regulation regulation

180 WR Act (post WorkChoices Act) ss 832–834. See cases above n 113. The Independent Contractors Bill 2006 (Cth) and the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006 (Cth) will shift these provisions to a separate statute. See generally Senate Employment, Workplace Relations and Education Legislation Committee, above n 174.

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Scheduling of hours

No

No

No

No

No

Annual leave

Yes

No

No

Yes

Yes if more than four weeks of service

Personal leave Yes (including carer’s leave)

No

No

Yes

Yes

Yes

No

Depends

Yes

No

Parental leave

Table 6: Difference in minimum entitlements of SER and non-SER workers under post-WorkChoices regime Minimum entitlements of SER workers compared with minimum entitlements of:

Minimum entitlements not enjoyed by non-SER workers

Independent Contractors

All except for protection against discriminatory dismissals and possibly an entitlement to notice through the unfair contracts jurisdictions

Casual employees

Paid annual and personal leave (including carer’s leave) Many denied an entitlement to notice prior to dismissal and protection against unfair dismissal. Note entitled to the casual loading under AFPCS

Fixed-term/task employees

Protection against unfair dismissal Entitlement to notice prior to dismissal

Employees with less than one year of continuous service

Unpaid parental leave Likely to have inferior or no protection against unfair dismissal and entitlement to notice.

What emerges from Tables 3 and 6 is that the WorkChoices Act has narrowed the gap in the minimum entitlements of SER and non-SER workers because SER workers no longer enjoy any entitlement to protection in the event of redundancies, regularity of working hours and overtime, penalty and public holiday rates. This is especially the case in relation to independent contractors who did not enjoy any of these rights under the pre-WorkChoices regime. The gap between the rights of casuals and SER workers has also decreased. While some casuals have lost their entitlement to overtime, penalty and public holiday rates, the position of SER workers is now similar to that of casual

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employees with both groups having no entitlement to regular working hours or protection in the event of redundancies. Together with SER workers, fixed-term/task employees and employees with less than one year of continuous service have lost their minimum entitlements to regularity of working hours and overtime, penalty and public holiday rates. The gap in the protection enjoyed by SER workers and these groups of non-SER workers, however, has been compressed because SER workers are no longer entitled to protection in the event of redundancies. The WorkChoices Act, then, produces a paradox. Non-SER workers are less precarious in the sense of enjoying protection inferior to that extended to SER workers. Yet this is the result of working conditions, especially those of SER workers, becoming more precarious in the sense of becoming more degraded.181

Conclusion: Preliminary Thoughts on New Standard Employment Relationships under Australian Labour Law Several conclusions can be drawn from the preceding analysis of ‘what is’ SERs and non-SERs under the WR Act before and after the WorkChoices amendments. The first is that the assumption that full-time ongoing employment is the SER under Australian labour law is incorrect. Full-time work pursuant to an ongoing contract of employment is not necessary for an employment arrangement to come within the scope of SERs under the pre and post-WorkChoices regimes. In some circumstances, regular part-time work performed under ongoing contracts will suffice. More importantly perhaps, full-time or, for that matter, regular part-time work, pursuant to ongoing contracts of employment is not suffıcient for the enjoyment of minimum entitlements under these regimes. More is needed in relation to length of service, non-casual status, size of employer and award coverage before a work relationship attracts such benefits. The ‘thickness’ of SERs under both regimes means that workers who enjoy minimum entitlements are probably a smaller group than previously thought. This puts in serious doubt whether SER employees under these laws are standard in the sense of being typical. Conversely, there seems to be a greater number of employees engaged in non-SER circumstances. For example, employees with less than a year of continuous service have rarely been considered by labour law researchers as a group that is particularly vulnerable. Yet it is clear that under the pre and post-WorkChoices regime, these groups of workers are precarious in the sense 181 Owens has similarly argued that ‘casual workers may lose their status as such and find their income in decline under the WorkChoices Act because all employment is precarious’: R Owens, ‘Working Precariously: The Safety Net after WorkChoices’ (2006) 19 AJLL 161 at 182 (original emphasis). For different notions of precariousness, see J Burgess and I Campbell, ‘The nature and dimensions of precarious employment in Australia’ (1998) 8 Labour & Industry 5.

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of enjoying fewer minimum entitlements compared with those of SER workers.182 Such a multiplicity of non-SER workers clearly adds complexity to patterns of precariousness. For one thing, precariousness in this sense cannot simply be mapped on to the employee/independent contractor distinction. Other forms of employment, for example, casual and fixed-term/task work, are clearly significant in mapping these patterns. The taxonomies of the earlier sections also point to another source of complexity: Non-SER workers are precarious in the sense of enjoying fewer minimum entitlements compared with those of SER workers in different ways and to varying degrees. Therefore, mere classification of a group of workers as precarious in this sense raises a host of questions: Which form of labour security of such workers is less protected? What is the gap between their protection and the protection of SER workers?183 More fundamentally perhaps, the limited utility of taxonomies based on forms of work is highlighted. Not only are the various categories of non-standard work precarious in different ways but workers within these categories, while sharing similar attributes, are also heterogeneous in other respects. For example, under both the pre and post-WorkChoices regimes, the entitlement of casual employees to protection against termination and unpaid parental leave will very much depend on the specifics of the casual work arrangements.184 This article has also revealed the limitations of a comparative notion of precariousness. While it is important to understand the differences in the levels of protection enjoyed by SER and non-SER workers, such differences do not tell the full story. As noted earlier however, the WorkChoices amendments have narrowed the gap in the protection enjoyed by SER and non-SER workers by reducing the minimum entitlements of SER workers. Put differently, the precariousness of non-SER workers in a comparative sense has lessened through the protection of SER workers being undermined. What is needed, alongside a comparative notion of precariousness, is a separate notion of precariousness that rests upon a standard of specified rights and benefits against which to evaluate the protection of workers. Such a benchmark can be applied equally to SER and non-SER workers and, therefore, draw out changes in their minimum entitlements.185 What then ‘ought’ to be the forms of SERs and non-SERs? How can the substance and functions of SERs be better achieved? While it is beyond the scope of this article to propose a new framework for standard employment relationships under the WR Act,186 several principles should be at the forefront of any reform agenda. The first is the principle of regulated diversity. Reform should, in the words of Bosch, offer ‘a flexible framework for self-organised 182 See Tables 2 and 6 above. 183 See Tables 2 and 6 above. 184 See Tables 1 and 5 above. For more detailed discussion of the heterogeneity of casual employees, see J-C Tham, The Legal Precariousness of Casual Employment: An Examination of the Legal Regulation of the Australian Labour Market Pre-2006, D Phil Thesis, University of Melbourne, 2006, Ch 9. 185 See also Tham, ibid. 186 See, however, discussion in Fudge, above n 6, at 124–6; R Owens, above n 9, pp 340–52.

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diversity, in which differing interests of individuals, firms and society are balanced out’.187 This implies that there should not be a single form of SER but various forms of SER. The design of new SERS should facilitate workers combining paid work and other socially useful activities. Under the new framework, these forms of ‘transitional employment’ should be properly protected.188 The principle of regulated diversity will also require loosening the grip of ‘continuous service’ with a particular employer as a gateway to minimum entitlements. One way forward may be to ensure that minimum entitlements are enjoyed on a pro-rata basis.189 Another possibility is to institute social drawing rights as proposed by Supiot. These are rights that are acquired through participation in a labour market and are not tied to service with a specific employer.190 The second principle is that of comprehensiveness. Reform of the framework of SERs must not only deal with protection extended to SER workers but also the regulation of non-SER work, otherwise its protective purpose may be thwarted. While any framework for SERs has a ‘built in’ discrimination,191 the dangers of this structural feature vary according to how the selective function is performed. Under the WR Act (pre and post-WorkChoices), the dangers were very acute with employers having both the ability and incentive to use non-SER employees in order to avoid the costs of minimum entitlements. The consequence was a constant risk of the protective purpose of SERs being outflanked by the engagement of non-SERs workers. An affirmation of the third principle, the principle of minimum entitlements, will alleviate this risk. At the heart of this principle is a recognition that minimum entitlements are social rights in that they are conferred upon members of the community or, in this case, upon members of the community participating in the labour market. What follows is that derogation from these entitlements through non-standard employment should be strictly regulated. This implies that there should be equivalence in terms of the minimum entitlements enjoyed by SER and non-SER workers. Such a principle is reflected in statements made by the Full Bench of the AIRC in the Metal Industry Casual Case where it said that casual employment under the Metal Industry Award ‘should not be a cheaper form of labour, nor should it be made more expensive than the main counterpart types of employment’.192 Failure to abide by the principle of equivalence in relation to non-standard employment 187 Bosch, ‘Towards a New Standard Employment Relationship in Western Europe’, above n 11, at 634–5. 188 According to Schmid, ‘transitional employment’ are ‘phases in the life cycle in which working time deviates substantially from’ full-time employment: G Schmid, ‘Is Full Employment Still Possible? Transitional Labour Markets as a New Strategy of Labour Market Policy’ (1995) 16 Economic and Industrial Democracy 429 at 430. See also I Watson, J Buchanan, I Campbell and C Briggs, Fragmented Futures: New challenges in working life, Federation Press, Sydney, 2003, p 7. 189 Owens, above n 100, at 234. 190 Supiot, above n 14, pp 213–4. 191 Muckenberger, above n 17, p 390. 192 Re Metal, Engineering and Associated Industries Award 1998 Pt 1 (2000) 110 IR 247 at [159].

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would, to borrow the words of the Full Bench, mean that ‘the exception may subvert the norm’.193 The principle of equivalence does, however, raise difficult issues in relation to the cashing-out of minimum entitlements, in particular, the payment of casual loading in exchange for the denial of certain rights. Campbell, for instance, has queried: [i]t may be possible to monetize benefits, but how is it possible to monetize rights? Can this be fair exchange, given the power of employers in labour market transactions? Does the money in fact provide equivalent protection?194

A new framework for SERs must address ‘the idea that basic rights and entitlements can be exchanged for increases in pay’.195

193 Ibid, at [96]. 194 I Campbell, ‘Casual Work and Casualisation: How Does Australia Compare?’, Report prepared for the ‘Work Interrupted: Casual and Insecure Employment in Australia’ Conference, Melbourne, 2 August 2004, p 10. 195 Owens, above n 100, at 229.