The Victorian government’s Sick Pay Guarantee, launched on March 14 of this year, provides taxpayer-funded sick and personal leave entitlements to casual workers in the hope of leading a broader reform at the federal level.

This latest attempt by the state to force its way into the workplace sets a dangerous and potentially unconstitutional precedent.

The logic of its argument is that casual workers are inherently inferior to their permanent counterparts. They are victims, unable to think or fend for themselves or escape from the predicament of being engaged in flexible work. No worker, in their right mind (according to the government’s narrative) could conceivably want greater flexibility, higher hourly pay, or the freedom associated with not being bound by the four corners of a permanent contract.

This is not just patronising; it is irresponsible.

The Shop, Distributive and Allied Employees’ Association (SDA) – the union for retail, fast food, and warehousing workers – applauds the Andrews government’s initiative, stating that it will help Victoria’s most vulnerable workers. And the United Workers Union calls for an expansion of the initiative. This is concerning because state intervention in the workplace does not empower parties to the employment relationship, but rather weakens them – and we have seen this occur in the debate regarding whether an independent contractor should be ‘deemed’ as an employee regardless of their intention.

For a generation, independent contractors had been told that they should have no say about their status at work. The state decided whether they were an employee or contractor through the application of a multi-factor test in reference to Hollis v Vabu and Stevens v Brodribb. Thankfully, the High Court earlier this year in CFMEU v Personnel and ZG v Jamsek, recognised that this whole idea is ludicrous and consequently upheld the primacy of the contract in determining the status of a worker. It essentially confirmed the legitimacy of independent contracting as a form of work. The Victorian government is now attempting to delegitimise casual work by eroding its key features.

Mandating sick and personal leave entitlements for casual workers (who already receive a 25 per cent loading in lieu of leave entitlements), first with taxpayers footing the bill and later financed by a new levy on businesses, will be the first of many steps to remove casual engagement from being an employment option.

This will be to the detriment of not just small businesses, but also workers in general who will be deprived of the opportunity to choose a casual working arrangement. The people who benefit most from this, of course, are union leaders. We know that casual employees are less likely to contribute to union finances than their permanent counterparts – and this is the key driver of unions’ and Labor governments’ push to delegitimise alternative forms of work. What they want, essentially, is to remove options for workers to have flexible working arrangements under the guise of promoting job security.

The best way to job security is a strong economy with fast growth. Australia’s unemployment rate is the lowest it has been since 2008. At 4.1 per cent, this is as close as we are probably going to get to full employment. Work is plentiful and the notion that workers are constantly in a precarious position, hanging by a thread, is simply untrue.

Indeed, many employers are already providing sick leave to their casual employees in the hope that such benefit would keep them from looking for opportunities elsewhere. But that’s the key, it’s a benefit that the private sector should be applauded for offering – not an entitlement that they should be mandated to provide. There is nothing to say that employers cannot grant sick leave, holiday pay, or any other benefits to their casual employees.

Regardless of the intention and outcome of the scheme, it may not even be constitutional in the first place. Victoria has referred its industrial relations powers to the federal government through the passage of the Commonwealth Powers (Industrial Relations) Act 1996. So, its powers to regulate private sector employment is actually very limited.

The legality of contradicting the National Employment Standards by way of mandating additional leave entitlements and financing them through a new employer levy (upon the completion of the pilot program) is dubious at best. If the Victorian government really cared about job security for casuals, many of whom work in retail and hospitality, then rather than seeking to act as a wedge between employers and employees, they would have been well advised to refrain from implementing trigger-happy responses throughout the pandemic over the last two lockdown years and give these employees the opportunity to just get on with their jobs.

Kevin You is a research fellow with the Institute of Public Affairs