PRESS RELEASE: Federal Court decides “casuals” can have their cake and eat it too
A Full Federal Court decision handed down on 20 May 2020 has made it near impossible for employers to engage casual employees for regular work.
Not only has the Court upheld a view that casual employees who work stable, regular and predictable hours aren’t to be classified as casual employees (which isn’t in itself surprising), regardless of what their contract says, it has struck a further blow by deciding that any casual loadings paid to those employees cannot be set off against the entitlements they gain as a result of being classified as a permanent employee.
Principal lawyer at McCabe Curwood, Nicola Martin says that unless the Federal Government acts swiftly to change the laws governing casual employment or there is successful appeal of the decision in the High Court, most employers who utilise casual labour will likely be facing claims for entitlements to annual leave (and other forms of leave) from casual staff.
“Because casual employees are not entitled to paid annual leave, personal/carer’s leave, compassionate leave and payment for not working public holidays, they have been entitled to receive a loading of 25% of the permanent rate payable for their role to compensate for “missing out” on those entitlements.
“The way most casual employment contracts are drafted meant that, until now, the amount of the loading could be “set off” against the value of the entitlements owing to the employee if it was later determined that they were deemed a permanent employee rather than a casual.
“The Full Federal Court’s decision renders the contractual set off clauses more or less useless and gives those employees both the casual loading and the permanent employee entitlements.“
Nicola says that her team at McCabe Curwood is encouraging business owners to perform an audit of their casual workforce to assess whether they may be exposed to claims.
“We are advising employers to scrutinise the working arrangements of their casual staff so that we can assess whether they would, in fact, be considered permanent employees. The employment relationship must be scrutinised to determine how long the employment was intended to last, whether the employment was to be regular and predictable, and whether the employer or employee were permitted to change the working pattern,” says Nicola.
“If, based on the assessment of the working patterns, the employee is likely to be deemed a permanent employee, we are then helping the employer assess how best to minimise their exposure, for example by ensuring they have complied with the casual conversion provisions in any relevant awards.”
Nicola notes, “We have already received enquiries from employers who are concerned about how this decision will impact their operations. Some of these businesses have engaged employees as casuals because the employee has requested it to get paid at the higher casual rate. Now they are facing the possibility of having to give those employees paid leave entitlements. It’s a terrible result for some businesses who are already struggling due to downturns as a result of COVID-19.”
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For more information or to arrange in interview with Nicola Martin, please contact Amanda Lacey from POPCOM on 0418448570 [email protected].
