A decision of the Federal Court released on 21 May 2020, has further complicated our understanding of what is a casual employee and what does the 25% casual loading compensate employees for.
Readers may recall an earlier Federal Court case involving the labour hire company Workpac. This case initially called into question if casual employees, in some circumstances, could be entitled to paid leave in addition to the 25% casual loading. As a consequence of this initial case, the Government introduced a new regulation to the Fair Work Act 2009, which sought to prevent “double dipping” where employees could receive both the 25% casual loading and paid leave.
A second case also involving Workpac was then filed in the Federal Court seeking to relitigate the same issues as the initial case. No doubt the hope was that the earlier decision would be overturned. However, the decision released by the Federal Court on 21 May 2020 did not overturn the earlier decision, it confirmed it. The decision also included findings which effectively render the Government regulation on “double dipping” meaningless, where casual employees sought to take any accrued leave.
What we don’t know is whether or not the recent decision will be appealed to the High Court or if the Federal Government will introduce legislation to negate the effect of the recent decision. Both options are possible, and clarity on casual employment will continue to evade us until one or both of these actions are taken.
Importantly, the decision will not affect all casual employment. Where casual employment is genuinely adhoc and unpredictable, the decision will have no impact. However, casual employees who have been employed on an ongoing and regular basis and have a genuine expectation of ongoing employment, may well be impacted in the future if the decision stands.
What this decision means for employers will not be known until we have clarity about the next steps being taken by the parties to the case and by the Federal Government. In the interim whilst we await clarity, employers should continue to monitor their use of casual employees, and where possible, ensure that casuals are engaged appropriately.
We will continue to monitor developments in this ongoing matter and will provide updates. Until then, we recommend that employers not assume Chicken Little was correct and think that the sky is falling in, as we are a long way from all casual employees being able to accrue and take paid leave on top of receiving the 25% casual loading.
If you require employment law advice, please contact us on Support@mazars.com.au or 1300 200 725.
Published: 22/05/2020
