Last month’s Federal Court decision of WorkPac v Rossato is being appealed to the High Court – you would probably appeal too if you’d been told your regular casuals were legally entitled to double dip:
- They get their 25% casual loading via an award entitlement because their employer has engaged them as a casual; and
- They get the same entitlements under the National Employment Standards that permanent staff get under the Fair Work Act because they don’t meet the exclusionary definition of ‘other than casual employees’.
The reason the Federal Court thinks regular casuals are ‘other than casual employees’ for the purposes of accessing NES benefits is there is no definition of casual employee in the Fair Work Act. So the Court relied on the common law definition which emphasises the on-demand, irregular, unpredictable nature of casual work.
Worse still, the casual loading cannot be ‘set off’ against a claim for payment of NES entitlements. This is because a casual loading is compensation for a lack of entitlement to NES benefits. The Federal Court in Rossato said regular casuals are entitled to NES benefits. (A payment for one purpose cannot be used as ‘credit’ towards satisfaction of a liability owing for a different purpose).
In short, there’s been a drafting stuff up and Australian businesses are now at risk of underpayment claims.
What to do?
The Federal Court said that a casual employee is an employee who has no firm advance commitment from her or his employer to continuing and indefinite work according to an agreed pattern of work. Only those workers who fall within this definition – ad hoc, intermittent, uncertain – should be engaged as casuals in the future.
We may get some legislative change later in the year, but even so businesses will still be discouraged from exposing regular workers to the risks of impermanent work that became all too evident during the first wave of COVID19.
A review of terms of engagement is recommended.