Casual staff on frontline of store cutbacks

By Dean Blake | 17 Mar 2020 View comments

Despite the Federal Government offering businesses various incentives to keep employees working during the coronavirus outbreak, several retailers are reportedly already cutting the hours of casual staff in a bid to save on labour costs.

Retail and Fast Food Workers Union secretary John Cullinan told Inside Retail he has received several calls over the past few days from members who are casual workers whose hours have been reduced.

“It’s certainly gathering pace,” he said about the derostering trend.

Cullinan is concerned that while some retailers have made commitments to provide paid sick leave to casual workers who are forced to miss work due to the coronavirus, they are simply empty promises. He believes most retailers will simply start derostering casuals, if they haven’t already.

The problem, according to Cullinan, is that retailers are not consulting with casuals staff before reducing their hours, which they are obligated to do under the Modern Award, as well as many enterprise agreements, if casual staff work regular hours.

“We’re yet to see it being done as a consultative process, it’s more like a simple announcement,” he said.

At the same time, Cullinan acknowledged the significant challenges retailers are facing right now.

Store cutbacks

“Some employers are blaming coronavirus infections. Some are blaming lower sales. Some are not specifying anything about why they’re derostering,” he said.

“But we can all see that the retailers other than the staples [supermarkets] are going to find difficult times ahead.”

Consumer confidence is at its lowest level in six years, according to Roy Morgan’s latest survey, thanks to a difficult bushfire season followed by a global pandemic.

According to ShopperTrak data, retail footfall fell 3.6 per cent at the start of March – 6.8 per cent down on a year ago.

Russell Zimmerman, the outgoing executive chairman of the Australian Retailers’ Association, told Inside Retail that the ARA has received many enquiries from its members on the issue, but that retailers are worried about more than just staffing at the moment.

“We’ve had a huge increase on our telephone advisory services yesterday [Monday] from members asking about a whole raft of issues, including [casual staff], and what to do about rent costs,” Zimmerman said.

Less consumer spending

“The obvious answer is that if you don’t cut down, as much as you don’t want to, you can’t afford rent and you’ll end up with one option which is voluntary administration.”

However, Zimmerman understands the issue is multifaceted, noting that while you can’t blame a business for trying to survive by cutting costs there will be knock-on effects.

“The problem is that when you do cut hours for staff – full time, part time, or casual – you give them less money to spend in the economy and it becomes self perpetuating,” Zimmerman said.

Derostering could be just the tip of the iceberg, with widespread store closures potentially on the horizon.

Flight Centre has already announced the closure of 100 stores, and several international brands are shuttering sites to limit the spread of the COVID-19 virus.

“With Apple already closing stores, [and] with the derostering of casuals escalating, we think there will be widespread store closures,” Cullinan said.

This article first appeared on Inside Retail, a sibling publication to Inside Franchise Business.

What are your retail/hospitality experiences? Are your franchisees cutting back on staff to cope with the downturn?  Email: sarah.stowe@octomedia.com.au