A major Federal Court ruling Wednesday is being touted as a “huge win” for potentially millions of workers, aiming to close what has been deemed a massive “loophole” in employment of casuals.
Casual workers make up around 20 per cent of the Australian workforce, and it is estimated between 1.6 and 2.2 million might benefit from the ruling, making them entitled to be paid annual, personal, and carer’s and compassionate leave.
The decision means staff with regular shifts will no longer be considered ‘casual’ workers, even if that is what is stated on their employment contract.
The ruling was applied to the case around mine worker Robert Rossato, who argued his (former) employer WorkPac dubbed him a casual worker even though he worked pre-determined “regular, certain, continuing, constant and predictable” shifts.
Rossato was employed as a casual over three-and-a-half years, on rolling contracts, and received the 25 per cent casual loading, being the usual offset for not being given benefits such as annual leave.
But the judges ruled he was entitled to leave benefits on top, which the defendant claimed amounted to “double-dipping”. WorkPac proffered if Rossato was to be considered a permanent employee, he must forfeit his casual loading, but the Federal Court disagreed.
Attorney-General Christian Porter says business and employment each face perhaps their “greatest challenges” in the nation’s history and that the Federal Government will pore over the ruling and consider backing any appeal to the High Court, given the ruling’s broad implications.
Porter had intervened in the case, supporting WorkPac with arguments specifically around the notion of off-setting leave claims.
Wednesday’s decision furthers the 2018 Skene ruling – also against WorkPac – but goes further to say employers are definitely not able to off-set leave entitlements with the 25 per cent casual loading, which had been a grey area since the prior case concluded.
The verdict has been lauded by workers and unions and gives the green light to several high-profile class-action cases, which were on-hold with proceedings against labour hire firms. The Australian Council of Trade Unions (ACTU) called the problem of deliberate casualisation a “loophole” that disadvantaged workers.
“It clearly demonstrates the need to reduce workplace insecurity,” offered secretary Sally McManus in a statement.
“We need to stop the practice of some employers labelling jobs ‘casual’ when they are in fact permanent. This has stripped workers of rights and security.
“It’s time for employers to accept that finding new ways to make permanent jobs casual has to end. We should be working together as a country to reduce the number of insecure jobs. It has got out of control and unfortunately too many people are now feeling the harsh reality of having no job protections during the pandemic.”
Industry bodies have quickly claimed the decision highlights the need for urgent legislative reform, to provide certainty to both businesses and employees, and prevent double-dipping claims. The definition of ‘casual employee’ needs to be exactly specified in the Fair Work Act.
Some suggest the Federal Government will now be forced to step in and make changes to the Act, which it has been reluctant to do since the 2018 Skene ruling, potentially finally ending years of uncertainty around casual and contractor work in Australia.
The Australian Industry Group, which represents about 60,000 employers, believes the cost for businesses forced to pay entitlements could approach $8 billion, and that employees engaged as casual and the paid casual loading should not be able to years later claim the entitlements of a permanent employee.
Chief executive Innes Willox says employers need to be encouraged to retain and take on casual employees, particularly right now, with unemployment and underemployment rapidly increasing during the COVID-19 crisis.
Workplace lawyers are advising business owners employing casual workers begin considering whether to offer part-time conversions, which must be voluntarily accepted by the employee, who may be reluctant to surrender the loading, facing significant disadvantage by doing so.
If casuals are not truly casuals – being employed at random and only called in as required – it is suggested employers will almost certainly be on the hook for additional loadings and leave entitlements.
People regularly employed as casual workers, even if the specific days each week vary, are most likely affected.
At this point businesses cannot decrease their liability for back-pay up until now, but changes in practices and reemployment of casuals when pubs reopen would limit exposure.
Employers are also warned against reducing or denying shifts to casuals unwilling to convert, or risk questions over unfair dismissal or adverse action.