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The decision in the recent Federal Court Case of Workpac v Rossato has received a lot of attention in the media over the last few days, and rightly so.  Unfortunately, it has created confusion in the employment law landscape amongst some principles which have been long understood to operate in a particular way, which are;

A person designated as a casual employee;

  • Does not receive paid annual leave and sick leave
  • Is not paid on public holidays if they are not working
  • Receives a loading as compensation for not receiving these entitlements

In the decision of the Full Federal Court, they did not accept the arguments of Workpac that Mr Rossato was a casual employee.

“The Court has found that the parties had agreed on employment of indefinite duration which was stable, regular and predictable such that the postulated firm advance commitment was evident in each of his six contracts.”

In addition to this the court rejected the argument from Workpac, that if the employee was entitled to claim Annual Leave, Sick Leave and Public Holiday Pay.  That they could offset any casual loading that had been paid against such a claim.

Where to next

The decision has created a significant grey area, and there are now 2 decisions of the Full Federal Court along similar lines (the decision of Workpac v Skene in 2018).  Meaning that until either a successful appeal to the High Court or legislative change clarifying the situation this decision needs to be taken very seriously.  Fortunately, Christian Porter has already flagged possible changes to the Fair Work Act.

How will this affect my business

It’s hard to say at this stage where the line will be drawn by the courts on each set of facts however, if you employ casual employees and they fall into the scope listed above, you should be considering what this means to you.  The potential cost of backpaying unpaid annual leave, personal leave and public holidays is significant especially if you are not allowed to offset the casual loading applied to compensate for these.

What should I do next

At Macro we believe in the philosophy of “Hope for the best, but plan for the worst”.  With this in mind you should

  • Consider what this might mean to your business
  • If you have casuals that fall within the concept of “indefinite duration which is stable, regular and predictable” consider seeking legal advice from an employment law specialist
  • Consider transitioning “casuals” to “permanent” employees.
  • Don’t rely on legislative change to come any time soon, this is traditional battleground territory for Liberal and Labor.  This is likely to be bitterly fought.

We are here to help. If you have any questions, or would like to discuss further with one of our Macro Group team members please don’t hesitate to call or email.

 

Date published: 22 May 2020

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