Do you employ casual workers? Due to a recent court decision, your casual workers might, in some circumstances, still be considered a permanent employee for the purposes of entitlements. Regardless of what their contract states and regardless of the payment of a casual loading.
In short, the effect of this ruling is that some “casual” employees might be entitled to paid annual leave, personal/carer’s leave, compassionate leave and public holidays. In addition, the Court ruled, in some cases, the casual loading paid to the employee could not be claimed back by the employer.
This aspect of the ruling has been informally labelled as ‘double dipping’ as affected casuals are able to access both casual loading as well as entitlements.
If you employ casuals, your business may be affected by this decision. To help you better understand this complex development, we’ve answered five questions you may have.
Note: At the time of writing, this decision has been appealed to the High Court. In the meantime, this decision may apply and it is important to understand whether this impacts your business.
1. What is the Rossato Decision?
In late May, the Full Federal Court confirmed (in the judgement of Workpac Pty Ltd v Rossato) that casual employees working regular and systematic hours with “predictable periods of working time” were likely to be considered permanent employees for the purposes of entitlements, regardless of what their contract said and regardless of the payment of a casual loading.
As a result, Workpac was ordered to pay its employee (Mr Rossato) unpaid annual leave, personal leave, compassionate leave and public holiday payments that were owing, on the basis that he was a permanent employee of Workpac, despite being engaged as a casual.
The employer has since sought leave to appeal the decision to the High Court, at the time of writing.
2. What is Regular and Systematic?
Regular and systematic is used to describe work performed over the duration of employment.
The term ‘regular’ implies a ‘repetitive pattern and does not mean frequent, often, uniform or constant’.
The term ‘systematic‘ requires that the engagement be ‘something that could fairly be called a system, method or plan’.
Where there is no clear pattern or roster, evidence of regular and systematic employment can be established where:
- the employer offered suitable work when it was available at times that the employee had generally made themselves available, and
- work was offered and accepted regularly enough that it could no longer be regarded as occasional or irregular
3. Doesn’t the 25% Loading Cover This?
It is unlikely that the 25% loading will cover entitlements particularly in the event that there is no clause permitting restitution for casual loading contained in the contract of employment. Even in circumstances whereby the contract contains such a clause, it might not be enough.
This however, is subject to appeal to the High Court, given how much impact this decision may have on businesses.
4. Why is this Called “Double Dipping”?
Many employers believe that Casuals who are receiving the 25% casual loading PLUS the entitlements to paid annual & personal leave are in fact, “Double dipping” as in the past, this additional remuneration (the 25% casual leading) was in lieu of the entitlements of permanent employees.
The decision has immediate practical implications for the bottom line of many Australian businesses as it may expose them to liability.
5. How Can I Prevent My Casuals Double Dipping?
In short, it is difficult if not impossible to prevent your casuals from ‘double dipping’.
However, improving your understanding of the status of your employees, and the difference between the various employment types may assist you in avoiding a double dipping situation in the future.
Want to know more?
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Business Development Manager - Employsure - Workplace Relations, Health & Safety - Employsure
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