Federal Court finds some casual workers entitled to paid leave
A recent Federal Court decision reignites the discord between unions and employer groups on the labelling of ‘casual’ work.
The landmark WorkPac v Rossato case rules that casual workers who have regular and ongoing work have a right to claim paid annual leave, personal/carer’s leave and compassionate leave and payment for public holidays in addition to casual loading, and that an employer couldn’t offset the casual loading to reduce liability for paid leave.
Essentially, an employee engaged as a casual, and paid a casual loading, does not necessarily make them a ‘casual employee’ for the purposes of annual leave entitlements under the Fair Work Act.
This landmark court decision upholds the key principle of the August 2018 WorkPac v Skene decision that work ‘permanent’ in nature is not ‘casual’ employment.
Read a legal perspective on the WorkPac v Skene case, here
The union view is that the decision is “a win for all workers who are suffering because of systemic casualisation”.
“It clearly demonstrates the need to reduce workplace insecurity,” Australian Council of Trade Unions (ACTU) Sally McManus says.
“We need the 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.”
On the transport employer side, the National Road Transport Association (NatRoad) says the decision negatively impacts businesses and calls on the federal Government to provide greater clarity via law reform.
“We agree with the Attorney General [Christian Porter] that the court’s decision will have an impact on many companies that are already struggling due to the coronavirus pandemic,” NatRoad CEO Warren Clark says.
“There is a need for urgent legislative reform to provide certainty to businesses and casual employees.”
Clark urges transport businesses to review their casual employment relationships.
“The main problem from the case is that no matter the provisions that apply under modern awards or enterprise agreements, if an employee has a regular and predictable pattern of work with an expectation of ongoing engagement, a firm advance commitment, they are unlikely to be casual employees under the law,” he says.
“Where members have engaged a person as a casual employee, road transport operators should ensure that they have a written contract of employment that identifies them as casual and ensure that the casual loading is clearly shown as a separate monetary amount on the employee’s payslip.
“Whilst the loading was not able to be offset against the leave entitlements in the current case, the documentation of the casual relationship remains important.
“But if there is a regular and predictable pattern of work, then consider changing the casual employee’s employment status to part-time or full-time or employment for a fixed period.”
Many casual employees wish to be casual “because it gives them flexibility and a higher rate of pay”, NatRoad claims.
“Therefore, it is also important to record any discussions with a casual employee about converting to part-time or full-time employment where the employee chooses to remain casual.
“However, such an employee can change their mind at any time and these arrangements need to be carefully managed.
“In the meantime, we will continue to support the federal Government in its consideration of a change to the law.”
Similarly, national employer association Ai Group says the case highlights the need for urgent legislative reform to provide certainty “and to prevent double-dipping claims by casuals who have been paid additional remuneration in lieu of the entitlements of permanent employees”.
“The current laws … operate as a major deterrent to the employment of casuals,” CEO Innes Willox says.
“The expression ‘casual employee’ needs to be defined in the Fair Work Act, in line with the common definition included in modern awards – that is, ‘a casual employee is an employee engaged and paid as such’.
“An employee engaged as a casual and paid a casual loading (or a loaded rate that accounts for a casual loading) should not be allowed to turn around years later and claim the entitlements of a permanent employee, like annual leave.”
Federal shadow industrial relations minister Tony Burke insists the case instead highlights ‘double dipping’ by employers assigning casual work while getting permanent hours out workers.
“You can’t roster people as permanent employees and then try to get away with assigning them a lack of security as casuals,” Burke says.