Employment Relations - Report Example

Report: Employment Relations There has been an unprecedented growth in the casual workforce over the past fifteen years, up from about 18.9% of all the wage and salaried workers in the year 1988 to 27.6% in the year 2003 (ANZ 2004, p.2); there are numerous advantages and disadvantages to the increased casualization of the workforce. From the employees’ perspective, casual employment offers the workers an opportunity to pursue other things such as education and family responsibilities while still doing paid work (Van Onselen, 2013); most of the casual workers favour part-time employment opportunities because they are usually engaged in other activities that may not allow them to hold permanent positions. For instance, statistics indicate that casual workers make up nearly 13.8% of all full-time workers and about 60% of the entire part-time workforce (ANZ 2004, p.1); furthermore, a vast majority of the casual workers are from the school-going age group of young people aged between 15 and 24 years. Given that many of these young people are more likely to be in school, it goes unstated that they are merely interested in a side income rather than a long-term commitment to the labour market, thus, casual employment allows them to combine education and work. Apart from that, casual employment offers employees an edge in the labour market if they are interested in permanent employment positions in today’s highly competitive global labour market (Flude & Sieminski 1999, p.166). Casuals employed regularly for a limited period of time, usually six months, are entitled to change to permanent employment status and employers have no powers to refuse their bidding. When they choose to convert to permanent employment, casual workers gain entitlements such as sick leave or annual leave, among other attractive bundles; nonetheless, despite the presence of conversion rights in many industries, many employees (approximately 98% of casual workers) have opted to maintain their casual employment status. Perhaps the attractiveness of casual employment positions is the highly motivating penalty of between 18 and 30% that casual employees receive above conventional pay rates (ANZ 2004, p.1). Casual employment can be regarded as an alternative to unemployment, particularly because it guarantees many job opportunities to many low skilled individuals that do not meet the threshold for permanent employment. In that case, casual employment is advantageous to employees because it leads to positive job creation in the labour market; many small businesses offering casual employment provide employment opportunities to many low-skilled workers whose job opportunities are highly limited as their scope of skills (Gaston & Timcke 1999, p.334). Retail trade accounts for a giant value of the casual workforce population (about 42% of all employees), followed closely by the property and business services sector, which absorbs nearly 30.3% of all employed workers in the country. Compelling employers to offer casual labourers a permanent position is more likely to heighten the risk of acute unemployment due to the loss of many jobs while stunting job creation rather than providing job security to casual workers. From a recent survey that covered nearly 400 small businesses across NSW, about 57% of the interviewed business owners reported that they would have to cut down some casual jobs if they were compelled to offer permanent positions to their casual workers (ANZ 2004, p.2). Instead of making all the casual workers’ positions permanent and granting the workers the full benefits and privileges of full time employment, these businesses are more likely to resort to only hiring a few permanent employees while terminating the remaining casuals. In that respect, the many small businesses that offer casual employment opportunities are absorbing a vast proportion of the unemployed population that would be totally jobless, thereby enabling them to eke a living while addressing the high unemployment rates in the country. From the management’s perspective, casual employment has enabled businesses to put together more flexible workforces to meet their production labour demands; the businesses’ increased flexibility in the organization of their workers has consequently contributed to the effective utilization of resources as well as rapid economic growth (Waleed 2010, p.52). Within the context of increased competition due to globalization forces, businesses all over the world are seeking opportunities to maximize efficiency in their operations in whatever ways feasible, and that can only be achieved through a more flexible workforce. A vast majority of small businesses rely on casual employment because the casual employment arrangements offer a whole lot of flexibility to them in return. Casual employment provides businesses with a lot of flexibility because they are able to vary the sizes of their workforce, by either increasing or decreasing the number of their employees according to the business needs without much trouble (Standing 2008, p. 25). Perhaps the most remarkable advantage of the increased flexibility is the fact that businesses have more control over their workforces and they can dismiss them at will in line with the fluctuating labour needs without suffering great financial consequences in terms of dismissal packages. Casual employment is also advantageous to businesses because unlike permanent employment, which calls for additional non-wage benefits such as superannuation, annual leaves, as well as parental or sick leaves, among other entitlements, it is cheaper for many small businesses (Watson, Buchanan, & Campbell 2003, p.2). Many of the small businesses cannot afford to offer permanent employment opportunities and all the entitlements that come with permanent job opportunities; in that respect, casual employment is a solution to the high labour needed to support their production levels. Casual employment is particularly advantageous to small businesses because making casual employment positions permanent would most definitely lead to a reduced workforce, consequently crippling the workforce’s potential as well as the businesses production capacity. On the negative side, casual employment is more likely to result to discontent and low wages because employers are less inclined to offer attractive packages for their casual workers, most of whom are more than willing to accept meagre pay for their services anyway. Casual workers have no job security at all and can be dismissed or retrenched at any given time without even prior notice because they have no ongoing contract of employment (Burgess, Campbell & May 2008, p.61). The other downside to casual employment is that it casual workers are not entitled to anything apart from their wages; entitlements such as superannuation, annual leave industrial protection as well as job security are only enjoyed by permanent employees. In that respect, casual employment does undermine the rights and benefits of employees; for instance, casual workers are often vulnerable to malpractices such as summary dismissal, underpayment, as well as arbitrary treatment and unclear working hours or schedules (May, Campbell & Burgess 2005, p.2). Casual employment is also more likely to result to a stunted career growth because many casual employment positions are for people with low skills and do not require advanced skills of performance like permanent employment. In that respect, employers are less inclined to provide their casual workers with career advancement opportunities thereby inhibiting their capabilities and skills and dooming them to a lifetime of casual employment without prospects of career growth. Furthermore, casual workers have no access to loans since the tenure of their service is not certain and this greatly limits their financial freedom, unlike their colleagues in permanent employment. Gross deficits in the rights and benefits of casual employment are more likely to worsen consequences for casual employees in the long run; besides that, increased casualization drives the wages and entitlements of permanent employment further down. From the management’s perspective, over reliance on casual labourers has its downside too, because it poses a severe risk to sustainable workforce’s skills development and productivity in the long term. Given the massive uncertainties in the global business environment, as a result of the rapid shifts in the product market environments, it is in the interest of every business to establish a highly skilled workforce that will ensure sustainable business growth in the tumultuous business world. Unfortunately, employers that rely on casual employment usually have the least incentive of investing in the progressive education and training of their workforces, with the implication that the workforce becomes ineffective over time. With the inevitable deterioration of the workforce’s skills development in casual employment, production is more likely to drop due to workforce inefficiency in the prevailing highly complex and competitive global business environment. Moreover, casual employment is ultimately costly for organizations because casual workers are paid wages above the normal industry rates and since they have no commitment to the business (NDS 2014, p.3), their production levels are always low compared to the production levels of permanent staff. Whereas casualization may serve short term goals by increasing business flexibility while reducing operational costs, it is inevitable that casualization will undermine innovation and dynamic productivity. Innovation and dynamic business productivity in the long-term is underpinned by continuous skill development through education and training as well as through hands-on experience, but casual employment does not offer any opportunities for skill development. Casualization inculcates casual attitudes among the employees and because of their lack commitment to the businesses or their employment, casual workers will be less inclined to care for equipment or raw materials thereby increasing the non-labour costs. At the workplace context, casual workers are less likely to push the management for better working conditions or for improved working efficiency to support enhanced business performance, and this inevitably cripples business potential. References ANZ. (2004). Economic Update: Casualization of the workforce. Retrieved from: http://www.anz.com/Business/info_centre/economic_commentary/Casualisation_of_workforce_brief_May_04.pdf Burgess, J., Campbell, I., & May, R. 2008. Pathways from casual employment to economic security: The australian experience. Social Indicators Research, 88(1), 161-178.  Flude, M., & Sieminski, S. 1999. Education, Training and the Future of Work II: Developments in Vocational Education and Training. NY: Routledge. Gaston, N., & Timcke, D. 1999. Do casual workers find permanent full-time employment? evidence from the australian youth survey. Economic Record, 75(231), 333-347.  May, R., Campbell, I., & Burgess, J. 2005. The rise and rise of casual work in Australia: Who benefits, who loses? Available from: http://apo.org.au/files/Resource/syduni_rise-of-casual-work_2005.pdf NDS. (2014). A guide to employing a flexible workforce in a person-centred environment. Available from: www.nds.org.au/asset/view_document/979322959 Standing, G. 2008. Economic Insecurity and Global Casualisation: Threat or Promise? Soc Indic Res, 88:15–30. Van Onselen, L. 2013. Pros and cons of the casualised workforce. Macrobusiness. Available from: http://www.macrobusiness.com.au/2013/11/pros-and-cons-of-the-casualised-workforce/ Waleed, A. 2010. Quarterly Essay 37 Whats Right?: The Future of Conservatism in Australia. Melbourne: Morry Schwartz. Watson, I., Buchanan, J., & Campbell, I. 2003. The Future of Work: Trends and Challenges in Australian Workplaces. Actu. Available from: http://www.actu.org.au/Images/Dynamic/oldsite/public/news/files/fowexsum.pdf Read More