‘Not the Time’: Victorian Industry Groups Criticize Sick Pay Guarantee For Casual Workers

People wear a face mask as they shop at George the Fishgonger shop at the Queen Victoria Market in Melbourne, Australia, on Dec. 24, 2021. Diego Fedele/Getty Images

Victoria’s industry groups have criticised the Andrews Government’s new Australian-first “sick pay guarantee” scheme for casual workers as not “necessary.”

“Now is not the time for another cost to taxpayers when casual workers already have additional loading catered for their hourly wage,” Paul Guerra, the Industry Chief Executive from the Victorian Chamber of Commerce and Industry said in a statement released on March 14.

The Victorian Labor Government announced on March 14 “Australian-first sick pay guarantee for casual workers” under the Victorian Sick Pay Guarantee pilot program.

The state is investing $245.6 million (US$176.9 million) under the scheme to provide casual workers with 38 hours of leave per year at the minimum hourly wage of $20.33 (US$14.64).

The Victorian government said that the new program aims to “transform casual and contract work in Victoria by providing vulnerable workers with the safety net they need to take time off when they’re sick or need to care for loved ones” and builds on previous welfare measures during the pandemic including the COVID-19 Disaster Payment and Isolation Payment.

However, despite its good intentions, the new scheme has not received positive feedback from industry groups with the Victorian Chamber’s Paul Guerra, stating that the chamber “does not consider” the pilot program to be “necessary” and that they have made their response known previously in their consultations with the government.

Guerra stated that whilst paid leave during isolation was “necessary and significant during this pandemic to prevent the spread of COVID-19, this is no longer a significant issue” with the pandemic impact subsiding.

The Australian Retailers Association (ARA) CEO Paul Zahra echoed Guerra’s statements stating that though the new scheme is well intentioned, it “poses more questions than answers.”

Zahra said that with casuals already receiving a loading paid by employers to cover sick leave and holiday payments, additional payments through the scheme could “disincentivise workers to take the step towards permanent employment, which is the ultimate aim of many employers.”

He also voiced his concern about the scheme encouraging further absenteeism during the industry’s current skills crisis due to high demands but low employment.

Absenteeism posed a “huge challenge” for employers during the JobKeeper period of the pandemic as under the JobKeeper program, employers had to pay employees eligible for the payment even though the staff may choose to not turn up to work.

Hundreds of people queue outside an Australian government welfare centre, Centrelink, in Melbourne on March 23, 2020, after Prime Minister Scott Morrison warned the coronavirus pandemic would cause an economic crisis akin to the Great Depression as the forced closure of pubs, casinos, churches and gyms began at midday on March 23. (Photo by William WEST / AFP) Photo by WILLIAM WEST/AFP via Getty Images

The scheme is currently open as a two-year pilot program with possibilities to make the program’s length indefinite or permanent in the future following the two-year period.

However, the Victorian Chamber has expressed that the program should not continue beyond its current limit, stating that if another pandemic occurs, then the government should “provide an appropriate scheme at the time in the event if it is required,” with the ARA asking for a “genuine industry consultation” prior to any permanent adoption.

The scheme is currently open for workers in hospitality, food preparation and delivery, sales, supermarkets, aged care and disability, cleaning, and laundry, as well as security.

More than 150,000 workers are expected to be eligible in the first phase of the guarantee, with the government exploring the “possibility for more jobs” as the scheme progresses.

“The last two years have shown just how difficult that choice can be for casual workers,” said the state premier Daniel Andrews.

“We’re doing what we can to make sure it’s a choice they don’t have to make.”