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Unsure About the Status of Your Casuals?

Employsure can help you better understand this recent Court decision

When Is a Casual, Not a Casual? 5 Quick Questions You May Have About the Recent Court Decision

Published July 07, 2020 (last updated August 5, 2020) Author: Employsure
casual worker at the register may be regular and systematic

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.

If you are a state system employer, this ruling does not strictly apply to you, however the ruling would be persuasive should a similar case be heard in the state system.

Note: This decision is highly likely to be appealed to the High Court. In the meantime, this decision is law 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 the Difference Between a Casual and Permanent Employee?

Permanent Casual
Description given to the relationship The terms of any contract or agreement between the parties will be taken into consideration. The terms of any contract or agreement between the parties will be taken into consideration.
Commitment A permanent employee typically commits to the employer for a continuous and indefinite time period, subject to the provision of notice of termination. A casual employee typically does not make any commitment to the employer as to their ongoing availability, instead committing on a shift by shift basis. There is no firm advance commitment to ongoing work on an indefinite basis and an employer can terminate the employment by giving 1 hours’ notice.
Regularity A permanent employee typically works regular and predictable hours.
The hours of work are typically predetermined on a timesheet/roster provided by the employer.
A casual employee typically works on an intermittent, irregular basis and has unpredictable hours of work. They typically work on demand and for short periods.*
Ability to refuse work A permanent employee is required to accept the hours of work agreed as part of their employment. A casual employee can choose to accept or refuse any work offered by the employer on a particular day and the employer can choose to offer work on a particular day.
Notification method A permanent employee typically has set hours of work that are known in advance. A casual employee is usually notified of their hours as needed, often on short notice and is employed on an hourly basis.
Loading A permanent employee typically receives a base hourly rate of pay or annual salary. A casual employee typically receives a casual loading on top of the base hourly rate of pay
Leave entitlements In addition to the base rate of pay, a permanent employee will accrue an entitlement to paid annual leave and personal leave, and will typically be entitled to a paid day off when a public holiday falls on their usual work day. A casual employee does not accrue an entitlement to paid annual leave and/or personal leave, nor are they entitled to a paid day off on public holidays.

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? Check out our upcoming guide that will provide more information on this decision, what you can do, and much more handy information, tips and advice on how to manage casuals.

About Employsure.

Employsure is Australia’s largest workplace relations specialist.

We take the complexity out of workplace laws to help small business employers protect their business and their people.

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