The union movement is on the warpath over unpaid overtime. Excessive works hours are undoubtedly contributing to a more stressful modern life. And that is also true of unemployment and under-employment. Society is being divided into the over-worked, under-worked or out-of-work.
The Australian Centre for Industrial Relations Research and Training estimates that 19 million hours a week overtime is being worked in Australia, about 60 per cent of it unpaid. And the percentage of casual workers has increased from 15 per cent in the mid-1980s to about 25 per cent now. One in three women workers is casual.
The Australian Council of Trade Unions draws some erroneous conclusions from this research. It equates the overtime with jobs, suggesting that 500,000 jobs (or more than half the unemployed) could be created if only people would stop working overtime, particularly unpaid overtime. The ACTU would like to see a ceiling on the number of hours worked. In the long term it would like to see a reduction in the standard working week below the present 38-hour week.
It is simplistic to imagine that work can be shared out; that if Worker A does fewer hours, Worker B can get more hours. It is more complex than that. So are the causes of the casualisation of the workforce. Part of the problem, of course, arises from the earlier successes of the union movement which have resulted in the pendulum swinging back the other way.
The reduction in the working week was as much a campaign to get extra hours paid at overtime rates as a genuine desire to work fewer hours in the week. Penalty rates for overtime caused employers to do their best to avoid paying it. The best method from an employer’s perspective was to get workers to do overtime unpaid, to annualise salaries and then put moral pressure on employees to do overtime for nothing. The unions were too successful for their own good. If they kept the 40-hour week and overtime was paid a the ordinary rate, employers would not have worked so hard to get annualised pay. So instead of a happy middle course of ordinary pay rates for overtime, we have a few workers getting up to double time and a mass of others getting nothing for their extra hours.
Similarly with the casualisation of the workforce. The unions were too successful. Unions got so many ancillary benefits for permanent employees that employers worked hard to avoid them, and the best way to do that was to hire casuals.
And other forces are at work. Superannuation, workers’ compensation, occupational health and safety among other requirements make employers strive for smaller work forces. So, too, does the high overhead cost of providing space and equipment for employees. Simply put, it is in the employers economic interest to have fewer workers working longer than more workers working shorter. Of course, that may not be in society’s interest as we have to grapple with the consequences of the over-worked and under-worked.
One thing is certain a shorter working week with more penalty-rate overtime is not the answer. Nor is a limit on overall hours. If anything the abandonment of penalty rates and no fixed working week would provide a better solution. Over the past decade or so, employers have done more contracting out because it has been more attractive. Most of that work has been done on a flat per-hour basis or a price for a job. The former involves no unpaid overtime because every hour is paid. The later encourages job-and-go which in turn encourages a shorter working week. Employees should see the trend and follow it, rather than continuing with past practices which have only led to employers rightly seeking to evade penalties and other shackles.
A further cause of under-employment and unemployment is that some people do no have the education and training to make them worth employing when so much cheaper unskilled labour is available overseas. That requires a greater commitment by government and employers.