Victorian Sick Pay Pilot – A sign of the things to come for Australia’s casual workers?

Opposition mulls national employment law change as state's casual workers become eligible for sick pay

On 14 March 2022, the Andrews Labor Government announced the start of a two-year pilot program to make personal and carer’s leave payments to eligible casual and self-employed workers under its Sick Pay Guarantee. It is available now. While the scheme only applies to eligible Victorian workers, the Sick Pay Guarantee is clearly consistent with the Australian Labor Party's (ALP's) National Platform’s focus on ‘insecure’ work and reinforces that the Covid-19 pandemic provides strong political grounding to launch workplace reform of this nature.

WHAT IS THE SICK PAY GUARANTEE?

According to the Premier, the impetus for the introduction of the Victorian scheme is the incidence of casual employees continuing to work whilst ill during the pandemic because they cannot afford to take a day off. The workers eligible for the scheme do not have the option of working from home. This is not a new concept: various forms of government-funded payments have been available to workers who have been required to isolate during the pandemic, including JobKeeper and the Pandemic Leave Disaster Payment.

The Sick Pay Guarantee provides workers in specified occupations, who are not otherwise entitled to paid personal and carer’s leave, payments for up to 38 hours of personal and/or carer’s leave per year when they are ill or required to care for someone.  Payments will be made at the national minimum wage based on the average number of hours worked and will be treated as taxable income.  

Occupations included in the first phase of the pilot program include hospitality workers, food trades workers and preparation assistants, supermarket and supply chain workers, retail and sales assistants, aged and disability care workers, cleaners and laundry workers and security guards.  The Victorian Government expects that approximately 150,000 Victorian workers will be eligible to participate in the first phase of the pilot program.

The Victorian Government will administer the pilot program and make payments directly to eligible workers upon application.  Employers are not required to be involved in applications or administration of pilot program, except if employees request evidence of employment or the Department of Jobs, Precincts and Regions needs to verify a claim during an audit.

WHO IS FUNDING IT?

The two-year pilot program is fully funded by the Victorian Government.  However, it is unclear how the Sick Pay Guarantee will be funded once the two-year pilot program ends and whether business will bear the impost of funding it.  This uncertainty has led to swift criticism from the Victorian Chamber of Commerce and Industry, the Victorian Liberal Opposition and the Federal Minister for Industrial Relations, Senator the Hon Michaelia Cash.

WILL IT BE ADOPTED BY THE ALP AS A FEDERAL POLICY?

Whilst it is unclear whether the ALP will adopt the tenets of the Sick Pay Guarantee as federal policy, it is clearly consistent with the ALP National Platform’s focus on providing greater protections for ‘insecure’ workers.  This was highlighted when Shadow Minister for Industrial Relations, the Hon Tony Burke MP, glowingly endorsed the Sick Pay Guarantee following its announcement.

However, if the ALP adopts a federal policy to provide casual employees with paid personal and carer’s leave entitlements, criticism that such a policy constitutes ‘double dipping’ by casual employees and represents an increased cost to business will be amplified. After all, the concept of paid leave for casual employees is inconsistent with the well-established tenets of casual employment: that a casual employee is free to provide or withdraw their labour at will. In these circumstances, there is no need for the concept of ‘leave’ from one’s employment obligations, as none exist. The payment of a premium rate of pay in the form of a casual loading is designed to compensate these employees from the inability to accrue paid leave benefits.

The jury is out on whether such a policy would achieve the ALP National Platform’s objective of reducing the incidence of ‘insecure’ work.  This is because it would not result in labour hire workers, casual employees or fixed-term employees becoming permanent employees. Conversely, it could have the unintended consequence incentivising casual employment arrangements for some workers who enjoy the flexibility of casual work.   

At the very least, federal legislation to expand the regulation of casual employment entitlements in this way would provide business with consistency in the face of a potential patchwork of state, territory and Commonwealth employment entitlements. Federal legislation could also quell concerns about the constitutionality of the Victorian Government’s Sick Pay Guarantee given the referral of its industrial relations powers to the Commonwealth.

Regardless of whether the ALP adopts the tenets of the Sick Pay Guarantee as federal policy in the lead up to the federal election, its announcement reinforces that the Covid-19 pandemic provides strong political grounding to launch workplace reform of this nature.