5.1
Retail trade, and accommodation and hospitality services, account for a large proportion of all casual workers across Australia. In 2021, 2.5 million people worked on a casual basis, almost one million of those were employed in hospitality and retail. With such a high concentration of casual workers, these sectors provide crucial insight into how casual work and job insecurity intersect.
5.2
As part of its evidence gathering, the committee heard testimony from a number of retail and hospitality workers, unions and organisations. This chapter details evidence on the positive and negative impacts of working in retail and hospital, for:
young people and migrants;
occupational health and safety outcomes.
Sector snapshot
Retail
5.3
The Australian Bureau of Statistics (ABS) categorises industries using the Australian and New Zealand Standard Industrial Classification (ANZSIC). The retail sector is primarily captured by ANZSIC Code 'G', or 'retail trade', which encompasses jobs in:
motor vehicle and vehicle parts retailing;
food retailing, including supermarkets;
'other store-based' retailing (consumer goods, pharmaceuticals, etc.); and
'non-store retailing and retail commission-based buying and/or selling'.
5.4
The retail sector is the single largest employer of Australians between the ages of 15 and 29. The National Retail Association (NRA) submitted that, there were approximately 1 331 700 employees in the retail sector as of February 2021. Of these:
197,200 were aged between 15 and 19 years;
240,500 were aged between 20 and 24 years; and
146,500 were aged between 25 and 29 years.
5.5
Due to the fact that retail offers many entry level jobs and employs a higher proportion of young people 'than most other industries', it is commonly not thought of as an industry in which to establish a career. However, many Australians consider retail their full-time and ongoing job. General Secretary of the Western Australian Branch of the Shop, Distributive and Allied Employees Association (SDA), Mr Peter O'Keeffe said that some retail workers have worked 'for years as casuals'. He reported evidence that, in a sample of 2150 casuals working for one of the biggest retailers in Australia, the average tenure of those workers was nearly three and a half years.
5.6
The industry faces significant job precarity with 38 per cent of retail employees engaged on a casual basis. According to Bankwest Curtin Economics Centre (BCEC) employees working in the sector 'have less stability' than employees in many other sectors, and real hourly wages have only grown 2.9 per cent since 2010.
5.7
Retail trade was heavily impacted by restrictions to combat the spread of COVID‑19, experiencing payroll job losses of 4.1 per cent between 14 March and 3 October 2020. ABS labour force data from February 2020 to August 2020 shows an even bigger fall, of 5.1 per cent, over a longer period.
5.8
The largest decrease in jobs was observed in the state of Victoria, which recorded 7.1 per cent less jobs than at the start of the pandemic. Other states affected were New South Wales with a 2.8 per cent decrease and Tasmania with 3.2 per cent decrease.
5.9
While job losses in the sector due to COVID were significant, data from November 2020 suggests employment in the retail trade sector has recovered, thanks to strong gains in supermarket and grocery stores, pharmaceutical and other store-based retailing. The National Skills Commission reported:
The Retail Trade industry has more than recovered from the sharp decline in employment in the first quarter of the COVID-19 impact, to record an increase in employment over the nine months to November 2020 (up by 43,600 or 3.5 per cent) and is now approaching its all time high of 1,307,200 recorded in February 2018.
5.10
At the time JobKeeper was announced, 36.8 per cent of casuals in retail trade had been with their current employer for less than 12 months, meaning they were not eligible for the supplement.
Hospitality
5.11
Hospitality is one of Australia's largest industries, with 817 500 workers identifying hospitality as their primary source of income, which accounts for 6.2 per cent of the total workforce. It is part of the broader accommodation and food services sector, which also includes some tourism occupations. ANZSIC Code 'H', 'accommodation and food services', encompasses jobs in:
food and beverage services, including restaurants, takeaways and cafes;
pubs, taverns and bars; and
5.12
The industry employs many young people with 45 per cent of the workforce aged 15 to 24 years, as well as older workers looking to re-enter the workforce. More than half of all workers in the industry do not have post‑school qualifications and around 61 per cent work part-time hours.
5.13
Hospitality is by far the most casualised of all industries, with 65 per cent of the workforce employed as such in February 2021. According to the BCEC, it is the most precarious sector to be employed in, with precariousness 'increasing over time'. Managers in the sector 'enjoy less stable employment' than managers employed in other sectors, and growth in real hourly wages has been 'relatively flat', at 1.9 per cent, over the period 2010–2018.
5.14
Chief Executive Officer of the Restaurant and Catering Industry Association of Australia (RCIA), Mr Wes Lambert, commented on the effect that COVID lockdowns have had on the composition of hospitality employment:
I would say at the moment, because of the severe shortage, it is going to skew more towards full time and permanent part time. Casuals will likely make up a much smaller percentage because of the border closures, because of the recent lockdowns and because of the restrictions that are still in place. Certainly, going forward, we expect that it will take a good year or longer, depending on when working holiday-makers, international students and skilled migrants are allowed back in the country, before it settles back. If we run a survey now, you'll likely see a result that's very heavily weighted towards full time and part time.
5.15
In a response to a question on notice, the RCIA undertook a 'staff breakdown survey' of its members. The survey revealed that as of November 2021, 57 per cent of employees were permanent full-time and part-time and 43 per cent were casual and labour hire; 'a huge change from PreCovid'.
5.16
Hospitality was the industry 'most heavily affected by trading restrictions to combat the spread of COVID-19' and experienced the greatest job losses between 14 March and 3 October 2020, with a 17.4 per cent reduction in payroll jobs during the period.
5.17
Figure 5.1 illustrates the industries most affected by COVID-19, showing that hospitality suffered the greatest sustained decline in rostered hours between March and July 2020.
5.18
Slightly more women in the industry lost jobs than men—94 400 women (18.4 per cent), compared with 74 700 men (18 per cent). At the time JobKeeper was announced, 46.3 per cent of casuals in accommodation and food services had been with their current employer for less than 12 months, meaning they were not eligible for the supplement.
5.19
The sector was also heavily affected by wage losses. Wages in accommodation and food services fell 13 per cent in the six and a half months to early October 2020.
5.20
According to the National Skills Commission, the industry has bounced back some of the way since October 2020, reducing the over-all fall in employment to 11.2 per cent over the nine months to November 2020. The biggest falls in the industry have been in accommodation, which has fallen by 19.6 per cent; cafes, restaurants and takeaway food services, which were down by 15.2 per cent, and clubs, which fell by 12.3 per cent:
While employment in the industry still remains below pre-COVID levels, the industry has recorded two consecutive quarters of employment growth—in line with the easing of restrictions across Australia.
5.21
Mr Tim Petterson, Coordinator at Hospo Voice, a branch of the United Workers Union (UWU), told the committee that the pandemic sent the hospitality industry 'into meltdown' and the casual employees who work in it 'into a state of extreme panic and desperation':
It exposed the rotten foundations on which this industry is built—on insecure work, on wage theft and on the exploitation of migrant workers.
Why is casual work so widespread?
5.22
Given the significance of both sectors to Australia and the link between casual work and insecure employment, it is pertinent to consider why so many workers are employed as casuals in the first place.
5.23
The flexibility afforded by casual labour is crucial for businesses in hospitality and retail to be able to keep up with fluctuating demand. Seasonal business cycles create short-term employment opportunities, which have implications on the duration and type of employment likely to be offered. Mr Lambert noted that in states such as Tasmania and ACT businesses require a reduced staff during winter and autumn. In others, such as Far North Queensland, staffing may fluctuate due to the rainy season:
Certainly, the flexibility that has always existed in the hospitality industry—either for the seasonality of tourism or of the weather—will always have an effect.
5.24
As submitted by the NRA, retail businesses have 'long' relied on a surge workforce during peak seasons, giving the well-known example of the 'Christmas casual'.
5.25
Mr Lambert also commented on the 'transient' demographic composition of hospitality workers. Many of the workers in hospitality—young people and temporary visa holders—are more likely to be staying for a shorter period, or do not view hospitality as a long-term employment option and will be 'going on to a different career or a different industry'.
5.26
With reference to the above two points, Mr Lambert said that the hospitality industry has a high turnover rate. Because of this 'semiskilled, skilled and highly skilled individuals are seen as a commodity and certainly are well regarded in the industry':
Most restaurants, once someone gets ingrained in that business in terms of a skilled or highly skilled position—ask any restauranteur and say, 'Would you give your eye teeth for your restaurant manager, assistant manager, your chefs, chefs de partie and sous chefs and chefs to stay with you forever?' and they'll tell you yes in most occasions because those positions are very difficult to fill and certainly those individuals are in very high demand.
5.27
From the perspective of the employer, Chief Executive Officer of the Australian Retailers Association (ARA), Mr Paul Zahra said 'with confidence' that there is a preference amongst retailers to employ a generally permanent workforce with a casual supplement for two reasons: maintaining a casual roster of employees is more expensive and costs a retailer on average 'at least 25 per cent more'; and service outcomes improve significantly by having more permanent staff.
5.28
Notwithstanding the above, Mr Zahra argued that the decision for employers to hire casually was largely a function of the complex modern awards. For example, the General Retail Industry Award is 'about 122 pages long':
So you can imagine giving that to a small business owner and asking them to understand it, interpret it and then execute it. That's why there's such a large preference, particularly in smaller businesses, to move to casual, which is an upfront payment. There's no commitment, and of course it's easier to manage.
5.29
Mr Gerard Dwyer, National Secretary-Treasurer of the SDA argued that:
There will always be a place for casuals by choice and also by stage of life—we don't dispute that—but certainly there is a capacity to promote greater permanency. Often I think it's a blind spot that companies may have as they set out to apply their business model.
5.30
Mr Zahra told the committee that he did not think job insecurity was an issue in the mainstream retail sector, instead saying that casual work was 'often the choice of the employee' to receive the higher rate of pay.
5.31
Mr Petterson acknowledged the need for a larger permanent workforce in hospitality and asserted that, for workers receiving the same shifts 'each week, each month, each year', there is no compelling reason they could not receive a permanent role if they wanted one.
5.32
Referring to the long-term tenure of many retail staff, Mr O'Keeffe pointed out the absurdity of keeping casual staff as casual and the risk they are exposed to by that designation:
These people, quite frankly, are not casuals; they are long-term employees who rely on their wage coming in every week, as inevitably it does until something happens, whether it be COVID or some other problem. These people are precariously employed
5.33
The United Workers Union (UWU) submitted that 'having a job in hospitality is synonymous with insecure work', drawing upon evidence about worker sentiment:
Even prior to COVID-19, a significant majority of hospitality workers (64.5 per cent) said it was very or extremely important to have a permanent job. Since the start of the COVID-19 pandemic this margin has increased to 76.5 per cent, with more than half weighing their need as extremely important.
5.34
On the contrary, Mr Lambert said that, at present, hospitality is 'an employee's market' and therefore a very secure time for employees.
[A]t present hospitality is certainly an employee's market, because there are so few [employees]. The expectation is that, because of that supply-and-demand issue…businesses are paying extra to ensure that their dedicated staff stay with them, not cutting their hours or giving them fewer hours. I think, if you were to walk into any restaurant or cafe in your electorate, or in Canberra, and say, 'What hours are your staff working?' they would say that they're all working at least 38, if not significantly more.
5.35
The National Foundation for Australian Women (NFAW) outlined some of the ways that employers in some industries, including hospitality and retail, seek to 'enhance flexibility and reduce costs' to the detriment of the workers:
… reducing or removing restrictions on working time arrangements; widening the span of ordinary hours; removing or reducing penalty rates for extended or unsociable hours; and reducing minimum periods of engagement. Lack of predictability of scheduling (on a daily and weekly basis) has further eroded job quality.
Key concerns raised in the retail and hospitality sectors
5.36
Mr Darcy Moran, a member of Hospo Voice and a hospitality worker of 15 years, said of casual workplaces:
I can testify that casualised workplaces are very poor for fostering good mental health, are very poor for fostering the kinds of savings and reliable income necessary to build a future and are extremely poor environments for allowing workers to operate in their fields with dignity and safety in the workplace.
5.37
Problems similar to those described above by Mr Moran in retail and hospitality were raised many times during the inquiry. Submitters put forward their frustrations and concerns with migrant and youth exploitation, wage theft, and reduced occupational health and safety outcomes. Furthermore, many of these issues have been exacerbated as a result of the pandemic.
Demographic disadvantages
Migrant exploitation
5.38
Migrant exploitation in the workplace has been well-documented in Australia, with the extent of such abuse having been made possible in large part by 'deeply precarious working arrangements'.
5.39
The UWU submitted that the 'power asymmetry' in casual employment relationships is emboldened in the case of migrant workers due to the fact that their right to remain in Australia is contingent on the work conditions of their visa. Therefore:
Any legal irregularity in the employee/employer relationship, whether the fault of the employee or not, can trigger a chain of events that leads to a grievous result for the worker (detention and deportation) that is disproportionate to any negative outcome potentially faced by the employer and is insensitive to the power dynamics.
5.40
Hospo Voice reported on the experience of Tiff Tan, a chef and international student from Malaysia. Ms Tan was reportedly paid $3 an hour by her former employer, a hospitality business in Melbourne, and was also promised a visa sponsorship if she continued work. On why she persisted with the employment, Ms Tan said:
I had a lot of anxiety, I had to pay my rent, I needed money, if I didn't go to work then I didn't get anything. I only had a half an hour break, I was tired, exhausted, I would go home and cry, my body was shaking.
Youth exploitation
5.41
The Retail and Fast Food Workers Union (RAFFWU) submitted that many large retailers and hospitality businesses 'rely on casual employment to exploit the young'. The RAFFWU outlined one such instance of this by fast food company McDonald's. A brief case study on this evidence is outlined below in Box 5.1.
Box 5.1: Evidence from the Retail and Fast Food Workers Union
As reported by the ABC, in 2018:
McDonald's employed 103 000 Australian workers—approximately 7 per cent of all the total hospitality workforce;
65 per cent of all staff were aged between 14 and 18;
These employees were paid significantly less than older workers on 'junior rates'.
While junior rates are legal, McDonald's was accused of maintaining a 'perpetual poverty wage system' by keeping a significant percentage of its employees young to keep labour costs down.
The RAFFWU argued the McDonald's business model was predicated on giving staff reduced hours as they got older and more expensive, which was enabled by employing them on a casual basis.
This practice was referred to as 'learn and churn', in the words of Union Secretary Mr Josh Cullinan:
The learn is about having new managers take on training and become managers or supervisors in the workplace—very few get to go on to that track.
The vast majority are stuck in the churn and the churn is when a worker turns 15, 16, 17, as they turn older and their wages go up because of junior rates, their hours are being cut and that's because they're casual.
Reportedly, a franchisee who gave evidence during a Fair Work Commission hearing in 2018 acknowledged that he was aware of the practice of learn and churn.
5.42
Professor Paula McDonald, Professor of Work and Organisations at the University of Queensland, suggested that the low rate of union participation amongst young retail and hospitality workers may play a role in their collective disempowerment:
We also know, from decades of research, that when a single employee is trying to navigate these issues on an individual basis with a single employer it usually doesn't result in any great outcomes. There are winners and losers in this. There are still occupational groups that enjoy protections from having a high degree of collective representation, and there are other cohorts and occupations that do not enjoy such benefits. If we think about young people, for example, in tourism, hospitality, retail et cetera, there are really low rates of unionisation and hence problematic opportunities for them to exercise voice in a way that doesn't personally disadvantage them in the workplace or such that no punitive consequences come as a response.
Wage underpayment
5.43
Both sectors are well known for issues of underpayment of wages, but hospitality in particular has a sustained and disappointing track record.
5.44
According to the Fair Work Ombudsman (FWO), the hospitality industry consistently has the highest number of disputes of any sector, with highest rates of non-compliance in the fast food, restaurants, and cafes sector. Some FWO findings during the past five years include:
In 2016–17 the FWO reported that the hospitality industry accounted for the percentage of disputes, despite only making up around 7 per cent of Australia's workforce.
A 2018 FWO audit of food precincts in Melbourne, Sydney and Brisbane revealed that 72 per cent of businesses had breached workplace laws, with the most common breach being underpayment of wages and failure to provide pay slips.
The sector continued to receive the most reports about workplace breaches, accounting for 34 per cent of all reports received by the FWO in 2019–20 (which is nearly 3 times more than the second highest industry, retail).
5.45
This evidence was substantiated by inquiry participants. A survey by Hospo Voice over 2020–21 found that 82 per cent of the respondents had experienced wage theft whilst employed in the industry. Mr Tim Petterson explained that such wage theft can take 'various forms' including:
people being paid below the legal hourly minimum, the withholding of penalty rates, tips theft, unpaid super and salary workers being required to do vast amounts of unpaid overtime.
5.46
According to Hospo Voice Director Ms Karma Lord the hospitality industry is 'ground zero' for super theft, and the problem is 'supercharged' by insecure work.
5.47
Ms Jorja Hickey, a casual hospitality worker, told the committee of her experience with an employer who did not pay any superannuation for 15 months; the employer was later fined $300 000 for underpayment of other staff.
5.48
Australian Retailers Association (ARA) submitted that whilst they acknowledge cases of deliberate underpayments do exist, the root cause of underpayments in retail is due to award complexity, and not criminal intent.
5.49
Mr Petterson rejected the argument that award complexity facilitates instances of accidental underpayment, describing wage theft in hospitality as a 'crisis [that] cuts all the way across the industry from small cafes to major employers' and 'the dominant business model'. Regarding how casual work promotes wage theft, Mr Petterson said workers are dissuaded from bringing attention to instances of underpayment as they are fearful of penalisation:
Hospitality workers who are casual or employed on a cash-in-hand basis understand that, when you have no guaranteed hours, it's a very risky proposition to stand up and ask to be paid correctly. If you speak up, you're likely to find that you're being given fewer and fewer shifts—you're taken off the roster. In fact, we found that 38 per cent of those workers we surveyed had direct experience with losing shifts because they stood up for their rights at work.
5.50
Compounding the problem, according to Mr Petterson, is the fact that there are few consequences for employers if they underpay their staff, and in many cases employers do not take the threat of penalisation seriously: 'It's effectively an interest-free loan from your staff'.
5.51
Mr Matt Kunkel, Director of Migrant Workers Centre, and a self-described 'retail veteran' similarly disputed the claim the modern awards are a hindrance to employers paying their workers correctly:
Many small businesses and medium businesses successfully apply themselves to the tax code, to consumer law and other regulations. Indeed, the retail award, for example, has become much more simple since the award modernisation process after the 2009 changes. So I don't accept the contention that people don't know how to pay their workers correctly. It's part of doing business. It's an important part of doing business.
Reduced occupational health and safety
5.52
Casual work can lead to diminished occupational health and safety outcomes. In retail and hospitality these can include an increased likelihood of being sexually assaulted or abused by customers, and poor mental health.
Sexual harassment
5.53
The committee heard how job insecurity for casual workers increases the difficulty workers face in raising issues around sexual harassment.
5.54
In a 2017 survey run by Hospo Voice, one in ten women working in hospitality reported they had been sexually harassed. Concerningly, the report indicated that employers did not often address instances of sexual harassment and many respondents said that they 'were expected to continue to serve offending customers'. It said:
For workers with precarious working arrangements, who are looking to lock in their next shift, speaking out against sexual harassment and job‑induced anxiety can get in the way of their next pay cheque and ultimately cost them their livelihoods. And, when presented with the ultimatum of paying the bills or insisting on a safe and respectful workplace, it is often safety and respect that are sacrificed.
5.55
In giving evidence, Sex Discrimination Commissioner, Ms Kate Jenkins acknowledged the above survey and identified that casual workers in hospitality often feel that 'they're not able to speak up':
They're also in an environment where they're dealing with customers and clients who will not have attended the same training that the best employers hold. In the service industry people are told, 'The customer's always right.' A young man told me in our inquiry that he was actually told he had to flirt with the customers.
5.56
Incidents of sexual harassment and the diminished capacity to access support can have far reaching consequences for workers. Acting Director of the Young Workers Centre, Ms Mairead Lesman, talked about an apprentice chef who was sexually harassed by their direct boss, threatened with firing, and unable to finish their apprenticeship if they told anyone. The incident as a result:
… had a huge impact on their ability to finish their apprenticeship and it had a huge impact on their mental health, as well as their ability—the scarring that we talk about when young workers enter the workforce and their first job is in a downturn or they have a terrible experience. They will feel that effect for many years.
Customer abuse
5.57
Customer abuse is a confronting reality for employees in retail and hospitality, no matter their employment status. However, where securely employed staff may receive support from management or feel able to stand up to said abuse without any threat to their job, casual employees do not.
5.58
In 2017 the SDA ran an online survey of thousands of retail and fast food workers and found that, even though more than 85 per cent of respondents had been subjected to verbal abuse from a customer in the last 12 months, 51 per cent said no action was taken after they reported the incident. This indicates that workers are unlikely to feel supported by their bosses after such confrontations.
5.59
Customer abuse reportedly increased during the pandemic. Hospitality and retail businesses have had to make substantial changes to their operations in order to continuing operating and ensure employee and customer health and safety.
5.60
A November 2021 report from the University of Sydney and the Australian National University (ANU) reported a 'a notable decrease in the quality of interactions with customers during the pandemic'. Other pertinent findings from the report were:
Almost half (49 percent) of retail workers felt their job security had decreased as a result of the pandemic. Those whose job security was most affected were
those under 30 (56 percent)
those from a non-English-speaking background (60 percent)
frontline (51 percent) and casual (55 percent) workers
those working in a locked-down region (53 percent).
5.61
Ms Hickey told the committee of her experience working in a supermarket during the pandemic that did not implement suitable COVID safety measures. When these concerns were raised to her manager Ms Hickey described him as 'dismissive':
He made me feel stupid and very small. At that point I said I didn't really want to work there and I felt very anxious. I told him that I didn't want to work there until the COVID-19 measures were in store, until I felt comfortable working there. He just kind of rolled his eyes and didn't seem to care. It really hurt because it takes a lot of courage to stand up to your boss and there's a possibility of having a decreased number of shifts, or you can just bear it all. At the end of the day, you're human and you're a worker.
Mental health
5.62
Research by SuperFriend, a mental health organisation which, in partnership with the superannuation and life insurance industries, designs and delivers workplace mental health initiatives, found that in 2020 the retail industry had the second highest proportion of workers with mental health issues at 66 per cent—among casual workers it was 69 per cent overall. Furthermore, casual workers reported that their workplaces were less supportive than full-time and part-time workers, with only 41.1 per cent having 'highly supportive' workplaces.
5.63
Mr Zahra acknowledged that, whilst he did share some concern about the high levels of reported mental health issues in retail, the issue goes 'beyond the type of employment'; saying 'many of our full-time people equally had issues around mental health'.
5.64
Hospo Voice submitted evidence from a 2020 survey in which 91 per cent of workers indicated that they were concerned about mental health in hospitality. A quote from a casual hospitality worker in the report says:
Unstable hours have really affected my mental health in the past. My current bartending position has been put in jeopardy unjustly multiple times and has made me feel worthless and unhappy. It is also frustrating to have shifts cancelled when you're already at work, where I could have been working at my other job had they just not rostered me on.
Concluding note
5.65
This chapter has provided a discussion of the employment arrangements within the hospitality and retail industries, focussing on the impacts of casual employment. The next chapter, Chapter 6, complements this chapter by focussing on the COVID-19 pandemic and its impacts on job security.