What about working children?

The Children at Work Study

Traditionally, little has been known about the work experience of children aged 15 years and younger. To address this, the NSW Commission for Children and Young People recently undertook a study on children and their working experiences. The study looked at how many children work, the type of work they do, the conditions they work under and how satisfied they are with them, the level and nature of work-related injury, experiences of discrimination and harassment, and how work fits in with other aspects of their lives, particularly time spent on leisure activities and school work and time spent with family and friends.
            The imperative for the research was a lack of information on children's work. Routine labour force statistics are collected on the activities of people aged 15 years or over. Little is known about the work experience of children 15 years or younger, and most of the data collections on work do not include them or do not specifically report on this age group. The large numbers of children 15 years and under who combine work with school are generally not captured in labour force or occupational health and safety data, policy or analysis.
            Because conventional definitions of employment suitable for adults may not be suitable for children, an expansive definition of work was used in the Commission's study determined by the experiences of the children themselves. Consequently, 'work' included any jobs or activities identified as such by participant children, with the exception of routine household tasks or schoolwork. It could be paid, unpaid or rewarded in kind. The work could be regular part-time work, casual work on an as-needed basis, or one-off engagements. It could include work for immediate or extended family, friends and neighbours, or work for a formal employer.
            The study employed a questionnaire of 11,000 children from Year 7 to Year 10 aged 12 to 16 years in 22 schools across New South Wales. Just over 56 per cent of children had worked in the previous 12 months. Of those, 61 per cent worked for a formal employer. Applied to the general population, these percentages equate to 240,000 children from 12 to 16 years who work, of whom 146,400 work for a formal employer. In addition to those working for a formal employer, 25 per cent work for their immediate family, 10 per cent for friends or neighbours, 3 per cent for extended family and 1 per cent for community groups or schools.
            Work begins early. By the age of 13, the majority of children work. A significant proportion of 12 year-olds also undertake some form of work. Work participation increases with age and school grade. The greatest proportion who work are in Year 10, reflecting the changing expectations and opportunities for children and young people as they grow older. The older age groups are more likely to work in the formal labour market, suggesting a 'pathway' with children initially doing informal work at home, moving on to similar work with other informal employers and finally taking up a variety of jobs with formal employers.
            The work done is diverse. While the most common jobs are babysitting, food and drink sales, leaflet and newspaper delivery, cleaning, and general farm hand work, children and young people work across the gamut of jobs requiring a range of competencies, knowledge and skill sets similar to adults. By the same token, adults at the fringes of the labour market also perform jobs commonly seen as 'children's work', such as newspaper and leaflet delivery.
            More than three-quarters of children and young people are paid for their work. A further 12 per cent are compensated with non-monetary rewards such as food and clothes, and around 11 per cent are not compensated at all. Children who work for their immediate family or for schools and community groups are least likely to be paid, while work undertaken for formal employers and extended family is most likely to be paid. The likelihood of pay increases with age. Hourly rates of pay are relatively low. Just over 22 per cent are paid between $6 and $8 per hour. Some are paid very low rates, with 29 per cent earning $4 or less per hour. At the other end of the pay spectrum, 16 per cent earn $16 an hour or more.
            Children's working arrangements give them flexibility, but it is often at the expense of security. Just less than 50 per cent of the work is casual, followed by regular part-time work (38 per cent) and one-off work (12 per cent). This means that around 62 per cent of children's work is both flexible and insecure. The Commission's research complements data on the highly casualised and precarious nature of employment for young people in Australia: in 2003, two-fifths (40 per cent) of casual employees were young people aged 15-24 years. Most children undertake work that can fit around their other activities. Fifty-six per cent work five hours or less per week and 26 per cent work between six and ten hours per week. Nearly one in ten children work more than 15 hours per week. Older children are more likely to work longer hours, reflecting their greater involvement in the formal labour market.
            Children are generally satisfied with the work that they do and their work conditions. They value the opportunity to develop new skills, exercise more responsibility and self-reliance, earn money and make a contribution to society. They are most satisfied with the recognition and support they receive and least satisfied with their income and degree of control and autonomy. The greater proportion of children and young people experiencing lower levels of control and autonomy at work reflects their marginalisation from decision-making roles. Significant numbers work in jobs where they have little control over when and what hours they can work, with few opportunities to contribute to workplace decisions. Children working in the formal sector are least satisfied with the degree of control they exercise at work. Their jobs involve longer and more structured hours and relatively inflexible shifts, and as junior employees they are least likely to be able to influence workplace issues. The lower level of satisfaction with pay indicates the importance of money in taking up work. As an immediately tangible benefit, pay is more likely to be scrutinised than other aspects of work. Not surprisingly, low pay rates or lack of any payment at all reduces work satisfaction.
            The research found that work is not always a positive experience for children in terms of safety. Just over 40 per cent were injured at work, with 7 per cent of injuries serious enough to require hospitalisation, medical treatment or time off school or work for three days or more. The most frequent injuries were burns, open wounds, sprains and strains, and superficial injuries. Together, these accounted for almost three-quarters of the injuries.
            The research also found an alarmingly high incidence of harassment of children and young people at work, with 48 per cent experiencing verbal harassment and 23 per cent experiencing physical harassment. The likelihood of experiencing harassment increases with hours worked, the regularity of work and the formality of work conditions. Older children are more likely to experience harassment as they are more likely to work in formal settings for longer hours.
            The overwhelming majority of children listed both positive and negative features of work. They like getting paid, gaining experience, feeling a sense of responsibility and the social aspects of working. They dislike the tiring nature of work, unfair treatment by employers and interference with other parts of their lives. Many felt exploited and treated unfairly because of their age, felt they are often bossed around and yelled at, and not paid sufficiently for the work they do.

Another recent study supports the Commission's findings

The Commission's research is supported by another contemporary study revealing young people have a limited knowledge of their employment rights and little capacity to defend their interests. ACIRRT's Young People and Work Survey 2005 suggests that even with the existing safety net, young workers will have considerable difficulty negotiating their own conditions of employment. The survey collected information from 5000 people aged 12-25 years across New South Wales on their knowledge, attitudes and experiences of work. It found that 50 per cent of those who thought they were ongoing employees received no paid leave. Fifty per cent had not received any written information from their employers about pay, hours of work or safety when starting their jobs. Twenty-five per cent never received payslips. Twenty-five per cent were unable to correctly identify whether they were casual or ongoing employees. One in seven casuals worked unpaid overtime. Over 10 per cent surveyed were required illegally to work an unpaid trial when they started their jobs. More than a third of illegal unpaid trials were for up to a week, while one in six was for more than a week.

Regulation of children's employment in New South Wales

There is no single law applying to the employment of children in Australia. Legal regulation of the employment of children fits within a framework of common law, as well as state and federal legislation and industrial instruments, the majority of which apply to all employees regardless of age.
            Legislation governing employment relations in New South Wales is primarily contained in the Commonwealth's Workplace Relations Act, 1996 and the Industrial Relations Act, 1996 (NSW). Decisions and awards made under the Workplace Relations Act establish terms and conditions of employment for workers under federal industrial instruments, while those made under the Industrial Relations Act do the same for workers under New South Wales instruments. Both laws can have application to young employees as well as their adult counterparts.
            The New South Wales Industrial Relations Commission is confined to making awards which regulate 'employees' under the Industrial Relations Act. The exclusion from the definition of 'employee' under the Act for persons engaged by their parent or spouse recognises informal arrangements found in some family situations which are not intended to create legally enforceable relations. The significant number of children identified in the Commission's research as working for their immediate family are without recourse to the remedies in the Act, but could still exercise their common law rights as employees and be deemed employees for the purposes of other legislation such as the Workers Compensation Act, 1987 (NSW).
            Under the Workers Compensation Act, compensation proceedings may be instituted by a person under 18. If the contract of service under which the young person was engaged at the time when the injury occurred was illegal, the matter may be dealt with as if the injured person had at the time been a worker under a valid contract. The Occupational Health and Safety Act, 2000 (NSW) applies to all employees in all workplaces in New South Wales. It does not address particular risks for children. Rather, it places a general duty on employers to ensure as far as practicable the health, safety and welfare of all their employees. Under the Children and Young Persons (Care and Protection) Act, 1998 (NSW), however, it is an offence to cause or allow a child under 15 to engage in employment that puts their physical or emotional well-being at risk.
            In addition to the industrial regulation and legislative provisions outlined above, there are a number of legislative restrictions on the employment of children in specific industries in New South Wales. While there is no general minimum age of employment in New South Wales, the Education Act, 1990 provides that children under 15 must attend school. For children and young people employed in door-to-door sales and the entertainment industry a Code of Practice covers matters such as record keeping, hours of work, breaks, requirements in relation to food, drink and toilet facilities, personal insurance (if the child is not covered by the Workers Compensation Act), payment of award rates and notification to parents in the case of injury or illness. Under the Liquor Act, 1982 (NSW), licensees may not allow a person under the age of 18 to sell, supply or serve liquor on premises. There are also restrictions on young people being employed underground in mines.
            While these instruments play an important role, they cannot of themselves provide sufficient protections for children and young people at work. They generally place restrictions on the employment of young people in prescribed circumstances, but do not provide a comprehensive framework for the conduct of employment relationships as the federal and state industrial legislation is designed to do.

The use of the corporations power to govern employment relationships

As detailed in Chapter 5, the corporations power in Section 51(20) of the Australian Constitution allows the Commonwealth parliament to make laws with respect to 'trading or financial corporations within the limits of the Commonwealth'. Up until now it has been used only in a limited way to govern certain aspects of employment conditions. For example, in 1993 the Keating Commonwealth Labor government used it as the vehicle for introducing enterprise bargaining through collective agreements. In 1996 the Howard Coalition government used it as the vehicle to introduce Australian Workplace Agreements (AWAs). It has, however, never been used as the primary power to govern the legal framework of industrial relations throughout Australia.
            Initially, the corporations power seems remote from the everyday working lives of children and young people. However, an estimated 85 per cent of private sector employees under New South Wales awards may be employees of corporations. The great majority would be transferred to the federal system through the application of the corporations power. The activities of a corporation are the litmus test in determining whether it is a financial or trading corporation. The courts' approach to what constitutes a 'trading' or 'financial' corporation has been broad. If trading or financial activities are a sufficiently significant or substantial part of its overall activities, it may be regarded as a financial or trading corporation even if those activities are not a large proportion of its activities. Football clubs, charities, hospitals, universities, local councils, and state government corporations could all be trading or financial corporations, depending on their activities (see also Chapter 5).
            For the past century, legislative powers to enact labour laws have been divided between the federal and state parliaments. Section 51(35) of the Constitution allows the Commonwealth parliament to enact laws with respect to 'conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits of any one state'. The Commonwealth's jurisdiction under the conciliation and arbitration power is limited to the conciliation, arbitration and settlement of industrial disputes of an interstate character. Any disputes which are not interstate in character fall within the jurisdiction of the states.
            The use of the corporations power to regulate the employment relationship means there would no longer be a need for an interstate dispute to exist for Commonwealth laws to apply. Wages and conditions of employment between a corporation and its employees could be directly legislated by the Commonwealth parliament. In a speech to the New South Wales Industrial Relations Society's 2005 convention, Professor Ron McCallum expressed the following view of the use of the corporations power:

...laws based upon the corporations power will be centred around corporations to the detriment of flesh and blood persons who interact with corporations. Wholesome labour laws seek to balance the rights, duties and obligations of employers and employees as equal legal actors in the processes of work and production ...However, labour laws enacted in reliance on the corporations power could not for long maintain this balance between employers and employees. In the fullness of time, these labour laws will become little more than a sub-set of corporations law because inevitably they will fasten upon the economic needs of corporations and their employees will be viewed as but one aspect of the productive processes in our globalised economy.

Quite how employment law will develop under the corporations power remains to be seen. At the least, however, it will accelerate the move towards individual contracts of employment, with a less worker-friendly landscape in some workplaces.

What are the proposed changes and how will they affect children and young people in New South Wales?

The Australian government aims to encourage workers to move away from collective bargaining onto AWAs negotiated directly with their employer. These agreements will override federal and state awards and could provide inferior conditions to the awards, including lower rates of pay. While existing employees could not legally be forced on to an AWA, it may be a condition of employment for new employees (see also Chapter 7).
           The AIRC will surrender its power to set minimum wages to a new body called the Australian Fair Pay Commission, which will have the power to set the adult minimum wage as well as the minimum junior, training and disability wage. Whereas AWAs are currently subject to a 'no-disadvantage' test designed to ensure they do not undermine awards overall, there will be no equivalent under the new system. Instead, agreements will only need to meet five minimum statutory standards set by the Fair Pay Commission: a minimum hourly rate of pay, annual leave, sick leave, parental leave, and maximum ordinary hours of work. Anything above these must be negotiated directly between the worker and the employer (see also chapters 6 & 7).

Transitional arrangements

There is also the possibility that, during transitional arrangements to a single federal system, some workers currently covered by state awards may not be covered by the federal respondency based award system.

Pay and conditions

Currently some awards have no junior rates provisions. Awards that do contain junior rates set them as a percentage of the adult rate, with the percentages increasing with age. Some provide adult rates at 21 years of age; others at either 18 or 20 years. Under the proposed system, junior rates will be set as a percentage of the adult minimum wage, currently $484 per week ($12.75 per hour). It is uncertain the age at which the Fair Pay Commission will determine that adult rates apply. Nor would there seem to be an impediment for juniors to be engaged under AWAs, even where there is no provision for the employment of juniors in the applicable award. The adult minimum wage is just that, a minimum, with most awards providing higher rates than the minimum. Individual contracts could require an adult worker to negotiate up from the $12.75 hourly rate, as well as conditions over and above the five statutory minimum conditions. Younger workers may be in a similar position.
           The Commission's research and that of ACIRRT demonstrates a perceived lack of autonomy and control by children and young people at work, and that they have limited knowledge of their employment rights and little capacity to defend their interests. This suggests that it will be very difficult for most young workers to negotiate rates of pay above the minimum. Although food and clothing costs the same regardless of age, the minimum junior wage could become the maximum for many children and young people at work. There may well be flow-on effects for children and young people working in the informal sector. Often these children are paid a portion of the rate paid, for example, to a junior shop assistant or clerical worker. In a deregulated industrial environment where award rates cease to have relevance, payments to children in the informal sector could also fall.

Skills-based career paths for young people

The new system could drastically diminish the provision of skill-based career paths and competency-based junior rates. The AIRC will no longer be able to conduct test cases such as its Junior Rates inquiry in 1999, which examined whether junior rates could be replaced by non-discriminatory alternatives. And since junior rates are exempt from federal, state and territory anti-discrimination legislation, there is nowhere to go for young people claiming their low rates of pay are discriminatory.

Australian Workplace Agreements (AWAs)

There is nothing to prevent very young workers from being covered by individual AWAs. Instances where children and young people have been treated unfairly through the application of AWAs are emerging. The South Australian Industrial Relations Court recently ordered an employer to pay $1438 to an employee who was a Year 10 student when engaged in 2003. The judge commented:

But the plain fact is that under this AWA the respondent worker was paid grossly less than she was entitled to as a minimum under the State Award ...The AWA sought to cut her minimum entitlement by approximately 25 percent.

Unfair dismissals

There will be virtually no protection from unfair dismissal if a young worker is employed by a corporation with 100 or fewer employees (constituting about 99 per cent of Australian companies). While there will still be some protection from dismissal on a number of discriminatory grounds, including age, in practical terms the number of young workers taking unfair dismissal claims on the basis of age discrimination will be minuscule. The overwhelming majority of children and young people, dismissed because of alleged poor performance or misconduct, will have no redress under industrial legislation. What is more, there is nothing to prevent companies aiming to increase business flexibility from restructuring their employment arrangements by creating multiple corporate identities with fewer than 100 employees to make it easier to dismiss employees.

Occupational health and safety

The Commission's research findings of a high incidence of injury and harassment of children and young people at work are supported by evidence that children and young people may be at greater risk of injury than adults at the workplace. They have limited life experience, work in irregular or casual jobs where there may be fewer occupational health and safety procedures in place, and are less risk-averse than adult workers. They lack awareness of their occupational health and safety rights and are uncertain about procedures to follow if they are injured or harassed. They often go to their employer first if there is a problem, reflecting their trust in adults to resolve issues. Although a serious injury sustained by a teenager can have repercussions for life, none of the five minimum statutory standards for AWAs deal with obligations to provide a safe workplace. The move to a decentralised national industrial relations system can at best do little to improve the rate of injuries of children and young people at work, and at worst exacerbate the problem.

Conclusion

Many adults will have great difficulty negotiating reasonable outcomes under the proposed industrial relations regime. As parents they are unlikely to be reassured that their child would be treated more fairly at work under a deregulated national system than they are at the moment. They would realise how much more difficult it will be for a 15 year-old to negotiate a reasonable contract with their employer to cover, for example, hours of work, wages, shifts, work duties, minimum starts, and call-backs. The Children at Work study found that children enjoy working, that work is important to them, that it is beneficial and contributes to their development. It would be an extremely detrimental step if the industrial changes do not take into account the need to protect a vulnerable and inexperienced group of people who are learning about working life.