About 150,000 Victorian casual workers will be eligible for five days’ paid sick and carer’s leave each year as part of a $246m Australian-first trial to tackle the “toxic” nature of insecure work.
The trial, announced by the Victorian premier, Daniel Andrews, on Monday, has already been criticised by business and industry groups as a “handbrake” on the state’s recovery from the Covid-19 pandemic. The state opposition also indicated they could scrap the trial if elected in November.
Under Andrews’ plan, eligible casual and contract workers will receive up to five days a year of sick or carer’s pay at the national minimum wage, which is now set at $20.33 an hour or $772.60 a week.
The first phase of the two-year trial will be open to about 150,000 workers in hospitality, retail, aged and disability care, cleaning and laundry services, security and the supermarket and supply chain industries. These workers are able to apply for the leave via the government’s Service Victoria website.
There are plans to extend the scheme in the second phase of the trial, details of which were not announced on Monday.
Andrews said the pandemic had exposed the “completely and utterly toxic” nature of insecure work, with some casual and contract workers forced to choose between feeding their family or going to work while infected with Covid, as they could not afford to take time off.
“That’s not a criticism of them, but it is certainly of the system that lets them down badly,” he said.
Andrews said the expected results of the trial, including a reduction in workplace injuries and illness, general productivity improvements from healthier workers and lower staff turnover rates, would hopefully lead to support from business.
“It’s appropriate that we prove this up, that we show that this actually works and that it’s just as good for business as it is for the workers, who will be able to – for the first time ever – fall back on a modest amount of pay in the event that they’re sick or they have to care for a loved one who is sick,” he said.
“It’s about learning the lessons of a one-in-100 year event and making sure the economy and community is better off.”
The United Workers Union, which represents many of the workers covered by the trial, welcomed the announcement and called on other jurisdictions to follow suit.
“If the Covid pandemic has shown us anything, it is that casual, precarious and insecure work has ramifications for the health of the whole community,” the national secretary, Tim Kennedy, said.
“Let’s not squander the opportunity to make practical and positive change to ensure a better and more resilient Australia that looks after the very workers who turned up, at risk to themselves and their families over the last two years.”
He said the federal government should amend the national employment standards to ensure 10 days of paid sick leave for all workers.
Ruby Lethbridge, a hospitality worker and Hospo Voice member, said many casuals go to work while sick “out of fear or desperation”.
“Their bosses might be pressuring them to work due to understaffing and if they say no, they fear that they could lose shifts,” Lethbridge said.
“Even if the manager does the right thing and covers the shift, the worker loses the paid work, which is of course essential to pay rent and other living expenses.”
In an exclusive interview with Guardian Australia published on Monday, Andrews said any ongoing scheme would be funded by an industry levy and braced for backlash from industry.
“It’s not a matter of ‘can business afford to support this?’ It’s a question of ‘can all of us afford not to do this?’” he said.
Within hours of the government press conference, businesses, industry groups and the opposition were describing the proposal as a “tax on employment” and a “sick-pay tax”, respectively.
Tim Piper, the Victorian head of the peak employer association Ai Group, said several occupations included in the first phase – such as butchers, chefs, pastry cooks, motor vehicle salespersons and supermarket workers – could not be considered insecure.
“Presumably phase two will involve an even wider set of eligible occupations and a much larger cost. These huge costs will no doubt require a very substantial levy on Victorian businesses if the government decides to pass on the costs to businesses at the end of the two-year trial, as it appears to be planning to do,” Piper said.
“The scheme is deeply flawed and should be abandoned. The last thing that Victorian businesses need is the prospect of a hefty payroll levy in two years’ time to fund this illogical scheme.
“The looming levy will kill investment in Victoria and put a handbrake on the recovery.”
Paul Guerra from the Victorian Chamber of Commerce and Industry said casuals already received a 25% loading in lieu of paid sick leave and carer’s leave.
“We don’t believe there needs to be any addition to that. Through the pandemic there was a cause to do something around that but we’re out of the pandemic now,” he said.
“Let’s get back to business as usual so businesses can truly recover.”
Piper and Guerra said they had raised their concerns with the scheme during consultation with the government.
Restaurant & Catering Australia, Australia’s peak body for restaurants, cafes and caterers, said they were not consulted and were left “bewildered” by Monday’s announcement.
The deputy Liberal leader for Victoria, David Southwick, indicated the opposition would scrap the trial if elected in November.
“The main focus needs to be job security and job opportunities,” he said.