Casuals, the new liability

05/06/2020 - 12:12

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The Federal Court has recently handed down a decision that will impact businesses nationwide. The landmark decision ruled in WorkPac v Rossato that casual worker, Mr. Rossato, was in fact entitled to paid annual leave, paid personal/carer’s leave and paid compassionate leave.

The Federal Court has recently handed down a decision that will impact businesses nationwide. The landmark decision ruled in WorkPac v Rossato that casual worker, Mr. Rossato, was in fact entitled to paid annual leave, paid personal/carer’s leave and paid compassionate leave. WorkPac argued that this would be “double dipping” as he was receiving a 25% casual loading on his hourly rate as a casual employee.

This decision has redefined what constitutes a casual worker stating that regardless of the labelling of “Casual” in employment contracts, other elements such as the post-contractual nature of the employment (hours, patterns and certainty of work) also plays a key role in defining whether an employee is a true causal.

When defining a true casual, the court said if the answer to any of the below is yes, the worker is in fact not a casual employee.

  • Systematic – Rostered well in advance
  • Regular – Same days, hours, patterns
  • Certainty – A degree of certainty about ongoing work / guaranteed hours of work
  • Long term – Same agreement for years

Employers have called for an urgent legislation review to overturn the effect of the courts judgment as this decision has exposed many Australian employers to the possibility of back pay claims worth up to eight billion dollars.

Does this decision clash with the future of the work? Do employers need to review their workforce design? Casual Conversion clauses were added to a majority of the modern awards in January 2020 as way of protecting “regular and long term employees” enabling them to request a conversion to a permanent employee.

What does this mean for the hospitality employer?

There are particular industries who hire predominantly casual staff, such as the hospitality industry, these industries are often filled with students who would prefer a long term arrangement with regular hours that may change each semester. Does a hospitality employer now need to fire their casual “students” every year to avoid significant financial risk?

What does this mean for working parents?

There are many employees who are working parents and seek the flexibility of a long term casual arrangement to fit in with school hours and school holidays.  As an employer it is now too risky to continue to offer this arrangement?

What does this mean for your organisation?

Whilst we are waiting to see if the government will update/ change legislation to provide further clarification on this decision, most employers are left with significant practical and ethical questions around their financial risk when engaging casual workers. 

So what can you do now as an employer?

  • Review and understand your casual employee rights under Fair Work and applicable Modern Award.
  • Conduct a review of your casual employees – How many casuals do you have? When did they start? How regularly and systematically are they working?
  • If you have long-term or regular casuals – Consider reviewing your workforce design/ converting their employment status to permanent.
  • Review the wording in your casual employment contracts.
  • Have a conversation with your casual workers – What do they want?

Is your business equipped to review your casual workforce?

The new federal court decision could place onerous requirements on employers who hire casuals and coupled with potential back payment claims companies need to review their workforce design. 

WCA Solutions can help

Contact WCA if you need any assistance with Human Resources or Industrial Relations

Call us on (08) 9383 3293 or email admin@wcasolutions.com

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