July 2006

The hidden health and safety costs of casual employment - how to minimise risks caused by casual workers

In recent years there has been a substantial increase in what has been termed casual or temporary employment. Employers are drawn to the use of casual employment because it is thought to contribute to lower labour costs and improved flexibility. However, increasing evidence points to the finding that the growth of casual employment is not necessarily a path to productivity or cost-saving, and that there are in fact, a number of hidden costs in employing significant numbers of casual workers.

As part of our commitment to assist clients understand and adequately respond to OH&S risks, Bartier Perry recently sponsored a short term research project at the University of New South Wales into the hidden health and safety costs of casual employment. The study consisted of a comprehensive review of the literature from a wide range of disciplines relating to the OH&S outcomes of employing casual workers.

The study found casual workers to be at greater risk of injuring themselves and others than their permanent counterparts therefore resulting in substantial costs for employers. For employers with a high proportion of temporary employees the cost of casual workers’ injuries and workers compensation insurance can be significant.

The research addresses a number of issues associated with casual workers including an analysis of where casual workers are most prevalent and the impact of casual workers on the permanent workforce. Job insecurity, social support, stress factors, absenteeism and presenteeism are all contributing factors to an increased risk of injuries.

The research concludes that awareness and knowledge of the risks posed by the casual component of the labour force will enable employers to formulate more effective preventative measures thereby mitigating the heavy financial burden of adverse OH&S outcomes for casual workers. It is possible, therefore with consideration and planning to have the benefits of a casual workforce but at the same time reduce the associated risks.

Recommendations

The report presents the following recommendations to assist employers develop programs to minimise the risks posed by casual workers.

  • Ensure that casual workers receive adequate training, induction and supervision - Casual workers are often only provided with basic induction training. If their incorporation in the organisation’s internal OH&S management systems is superficial and problematic, the use of casual workers can further contribute to disorganisation and adverse OH&S outcomes.

  • Facilitate further worker participation and representation among casual workers - A number of Australian studies have found a positive relationship between worker representation and improved OH&S management arrangements, concluding that the introduction of health and safety representatives led to major changes in attitude.

  • All parties must be aware of the locus of OH&S duties and responsibilities - Labour hire agencies and host employers share a responsibility to provide a safe workplace and to provide their workers with relevant training.

  • Conduct ongoing risk assessment and monitoring of casual and permanent worker activities - Employers should incorporate continuous risk assessment and monitoring of casual and permanent workers as it is essential to ensure that they adhere to OH&S management systems (e.g. continuous communication and feedback loops). Too often casual workers slip through the gaps in OH&S training.

  • Focus on Psychosocial Issues - OH&S agencies are increasingly addressing work organisation issues, also known as psychosocial issues. Employers need to address these in terms of potential litigation. Costs of psychological injury claims are significantly higher than other injuries because they tend to involve longer periods of time off work and higher medical, legal and other claim payments.

  • Ensure clarity in communication and reporting systems, work practices and procedures as well as facilitating knowledge and compliance with OH&S policies and legislation - The use of agency workers and other casuals, creates more complicated lines of management control and fragmented occupational health and safety management systems leading to ambiguities, confusion and more adverse OH&S outcomes.

  • Awareness of At-Risk Groups - Employers should be conscious of the fact that many casual workers are young and work part-time. These workers are especially at risk of adverse OH&S outcomes. A current study of the OH&S inspectorate reveals a high level of concern regarding labour hire workers. Employers should be mindful of the dangers and risks inherent in the employment of these groups. Additionally, employers in industries characterised by a particularly high rate of casual workers should be encouraged to take the added risks of casual employment into account and take additional measures when designing OH&S management systems.