The Full Bench of the Federal Court of Australia (WorkPac Pty Ltd v Rossato [2020] FCAFC 84 (Decision)has again confirmed that an employee engaged as a casual can still be considered a permanent employee despite there being a contract of employment stating otherwise.
If you engage long term regular and systematic hours casuals, even those who, after 6 months elect to continue with the casual status of employment will have a claim to make for annual leave, paid personal/carer’s leave and public holidays, etc,.
What? I hear you gasp, isn’t the 25% loading paid “in lieu’ of these leave entitlements?
You would think so, but no.
Long term casual employees are likely to be considered permanent employees rather than casual employees, will accrue and have access to leave entitlements for the period of service. To understand your risk to possible claims for underpayment of entitlements by casuals, do this quick check to see if and how many of the following apply to the casuals engaged in your workplace;
- An indefinite duration
- Stable, regular and predictable hours and times Paid in lieu of leave entitlements 25%
- Paid a flat rate that does not separate the casual loading
- (if you have provided ) Letter of offer or contract does not state the purpose of the 25% loading
- Letter of offer or contract does not include a “restitution” clause if the employee is considered a permanent employee
- Letter of offer / contract does not state a “set off” clause for the 25% loading
It is recommend that employers:
- Undertake a review of casuals engaged to determine the commercial risk associated casuals who might be considered permanent employees;
- Assess feasibility of rostering casuals so they are not working regular or systematic hours
- Issue casuals with employment contracts to ensure they are suitably worded with set off clauses as well as a clause permitting a reclaim of casual loading paid, in circumstances the casual employee is considered permanent.
Given the wide-reaching impact and consequences of this decision, KMB is here to address any queries that you may have in relation to mitigating exposure to claims from casual employees and how best to engage casual employees moving forward.
To discuss the impact this may have on your business, please get in touch at karolina@kmbresources.com.au.