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The decision of the Full Federal Court this week to allow some categories of casual workers to claim similar benefits to permanently employed workers will increase the risks of widespread job losses in September when the JobKeeper scheme ends, the Australian Industry Group has warned.
Innes Willox, chief executive of the Ai Group employers’ organisation, said Parliament needs to act urgently to protect the community, to preserve fairness and to prevent ‘double-dipping’ claims by casual workers as a result of the findings.
On Wednesday, 20 May the Federal Court found that some casual workers on regular and predictable shifts were not actually casuals. Consequently, despite what was stated in their employment contracts, the workers are entitled to be paid annual, sick and carer’s leave.
In what has become known as the ‘WorkPac v Rossato case’, the court found that, until 2018, mine worker Robert Rossato was employed for three and a half years by the labour hire company WorkPac as a permanent worker, even though his contract described him as ‘casual’.
Rossato worked at Glencore mining company and was paid a 25% casual loading built into his wage. However, the Court found he still had an entitlement to leave that could not be offset through the loading since it did “not have a close correlation” to the leave entitlements.
According to the court, the work was “regular, certain, continuing, constant and predictable” and could therefore not be classified as ‘casual’.
Willox said that under the JobKeeper scheme a casual employee is eligible for the benefit if the employee has worked on a ‘regular and systematic basis’ for at least 12 months. This concept is drawn from the unfair dismissal laws in the Fair Work Act.
“The unfair dismissal laws, the JobKeeper laws and long service leave laws expressly recognise that casuals often work on a regular and systematic basis for more than 12 months,” Willcox noted.
“Awards also recognise this through the standard award clauses that give casuals the right to request permanent employment after six or 12 months, with the ability for an employee to remain casual indefinitely if they prefer to retain the 25% casual loading.”
Willcox said the 25% standard casual loading arose from a decision of a Full Bench of the Australian Industrial Relations Commission (now the Fair Work Commission) in 2000. At the time, the loading was increased from 20%.
The Bench calculated how much each relevant entitlement was worth in terms of a loading. While not adopting a precise formula, 10.1% of the 25% was calculated as compensating for the absence of annual leave entitlements.
“The Commission’s decision highlights that it is blatant ‘double-dipping’ for an employee to receive the casual loading and annual leave entitlements,” he claimed.
Willcox said the Federal Court’s decision flew in the face of widespread industry practice, so the risk and uncertainty caused by the decision would have several important effects.
These included encouraging ‘double-dipping’ claims by employees who have been engaged and paid as casuals; discouraging employers from retaining casuals, including at the time when the JobKeeper scheme ends; discouraging employers from engaging new employees; and increasing the level of unemployment, including amongst young people who are already disadvantaged in the labour market.
The government has already indicated that it may challenge the court ruling.
However, Labor’s industrial relations spokesman, Tony Burke, argued that the Morrison government should not overturn the decision through legislation.
“If there’s any ‘double dipping’ going on here it is being performed by the employers – they’re taking advantage of the insecurity of casual work while still getting permanent hours out of their workers,” Burke was quoted as saying by Fairfax Media.
Construction Forestry Maritime Mining And Energy Union (CFMMEU) national president and mining secretary, Tony Maher, said the decision was “fantastic” as it called out employers who labelled their workers casuals but employed them full-time.