More than half of casual workers in Australia probably do not receive the legal 25% casual loading in their pay according to a new report by Griffith University professor of employment relations David Peetz.

The report, ‘What do the data on casuals really mean?’, outlines the ways casual jobs allow employers to reduce workers’ rights and entitlements.

Casual loading is defined as a higher pay rate than equivalent full-time or part-time employees. This 'casual loading' is paid because casual workers don't receive benefits such as sick or annual leave.

The report looked at the compensation of casual workers (referred to as leave-deprived workers in the report). It studied workers who received their casual loading as well as workers who did not receive casual loading and workers who did not know whether they received their casual loading.

According to the report, it is plausible that the majority of those who did not know whether they received casual loading did not, in fact, receive casual loading. Reasons for the lack of compensation may vary.

“Broadly speaking, there are two reasons why a worker may not receive a casual loading,” the report stated. “One reason is that the employee is simply paid an undifferentiated ‘all up’ rate that significantly exceeds their legal minimum rate of pay but does not specifically identify a casual loading. Whether this is an underpayment may depend on the circumstances of the case. The second reason is that some workers simply may be demonstrably underpaid.”

The report adds that non-compliance with industrial requirements is a significant problem.

The Australian Council of Trade Unions said being classed as a casual doesn’t mean flexibility. It means fewer rights, no paid leave and lower pay. ‘With or without loading, casuals suffer a pay penalty compared to permanent employees rather than receiving a premium.’

“Because of excessive casualisation Australia is on par with the USA with one of the highest proportions of workers with no guaranteed paid sick leave or holidays,” the Council stated.

Australia lags behind 88% of other high-income countries that require temporary workers to have the same leave entitlements as permanent workers.

Of the 800,000 jobs lost since the beginning of the pandemic, 500,000 were casual workers, insecure jobs were the first to go when the pandemic hit and unfortunately even more are being created during the recovery, according to the Council.

“This report shows that casualisation is a systemic issue in the Australian workforce – the majority of people who are casual should not be and do not receive any of the supposed benefits of casual employment,” ACTU Secretary Sally McManus said.

“1 in 4 Australian employees do not have any leave entitlements, leaving us lagging behind most other OECD countries. These are the workers who have carried us through the pandemic. Casualised jobs with no access to paid leave was our weakest link in our efforts to stop the spread of Covid in our communities. We now need to turn that around, not make it worse.”

The report comes as Australia’s federal government is planning to introduce new workplace reforms under its industrial relations law. Among these reforms includes a new statutory definition of casual employment.