By Leigh Johnston
Employer groups are outraged by the announcement that Labor is moving to repeal the regulation allowing employers to offset loading paid to casual employees against entitlements owed if the employee is later found to be permanent.
The regulation being challenged gives employers the ability to offset loadings already paid against any order to backpay entitlements to workers claiming to have been misclassified as casuals. This was introduced in response to last year’s landmark Skene decision in the Federal Court, which ruled that a truck driver employed casually through WorkPac at a Rio Tinto mine was owed annual leave entitlements in addition to his casual loading.
Meanwhile, Workpac is seeking to challenge in the full court but employers have warned that the implications could expose them to be liable for an estimated $8 billion dollars in back pay. Attempts to make these claims have already begun with a class action led by the Adero Law Firm seeking to recover up to $84 million for about 7,000 on-hire casuals engaged by Workpac.
The Construction, Forestry, Maritime, Mining and Energy Union’s $12 million casual class action against labour hire company WorkPac is also listed in the Federal Court on Monday.
While the Workpac case continues to deliver debate, business groups say Labor’s latest attempt to obstruct the regulation introduced under the Morrison government has heightened their concerns for the viability of many businesses and the jobs of thousands of employees threatened by casuals trying to “double-dip” on their entitlements by claiming annual leave on top of their casual loading.
However, Labor senator Don Farrell gave notice on Wednesday of a motion to disallow the regulation, in a move supported by the Greens.
In response, small business employers and their advocates have accused Labor leader Anthony Albanese of attacking small businesses:
“Small businesses across Australia are shocked by [this] move,” Australian Chamber of Commerce and Industry chief executive James Pearson said.
“Making someone pay twice for the same thing, years after the fact, is not a fair go.”
The opposition is lobbying Centre Alliance and Jacqui Lambie to support a Senate motion that would overturn the casual loading offset regulation, created by former industrial relations minister Kelly O’Dwyer.
One Nation’s two senators oppose the Labor move, while Tasmanian senator Jacqui Lambie and Centre Alliance’s Rex Patrick and Stirling Griff are undecided.
Australian Conservatives’ Cory Bernardi has not confirmed his position but he is expected to support the government – which would deprive Labor of the absolute majority it needs to knock out the regulation.
Australian Industry Group chief executive Innes Willox urged crossbench senators to reject the Labor push, saying it was “obviously unfair for an employee who has been engaged as a casual and paid a casual loading to be able to pursue years of back-pay for annual leave”.
“The disallowance of this regulation would send a very dangerous signal to the CFMMEU and plaintiff law firms who are currently pursuing ‘double-dipping’ class actions against employers,” Mr Willox said.
Labor’s industrial relations spokesman Tony Burke said the legal impact of the regulation – and its disallowance – was “limited” but that “the principle here is important.”
“Labor will always oppose Liberal attempts to erode the rights of workers,” Mr Burke said.
“Casual work is meant to be just that: casual. Using casual contracts for jobs that are in fact permanent is an abuse.
“As the Federal Court found, the ‘double dipping’ here has been performed by the employer – they’re taking advantage of the insecurity of casual work while still getting permanent hours out of their workforce.”
Industrial relations minister Christian Porter said Labor must explain to small business owners “why they should be forced to pay twice if a worker has already received a casual loading.”
In support of the regulation to protect businesses from ‘double dipping’ claims, Senior Employment Relations Adviser from Employsure, Michael Wilkinson said Labor’s proposals are nonsense, “This is a backflip on a long-held position that an employee receives either casual loading or permanent entitlements, but not both.”
“Small business owners are already facing a complex web of red tape and a raft of workplace relations legislation that is constantly being amended by the workplace relations tribunal.
“To complicate the matter further, the term ‘casual employee’ has no precise definition in the Fair Work Act, and is largely defined by court decisions, leaving small business without clarity.
“The viability of offering casual work is being actively reconsidered by many Australian businesses. The concern is that the uncertainty and proposed backflip to disallow the regulation, will reduce employment opportunities nationally as businesses explore alternatives.
“Casual work is about providing flexibility and productivity benefits for employers and employees. However, in this state, it is difficult to say that casual employment achieves anything more than meeting a very niche requirement for a small number of employers,” he said.
One in every five Australian workers is a casual employee, with more than 80 per cent of casual employees working for small and medium businesses with fewer than 100 staff members, according to the Characteristics and Use of Casual Employment in Australia report, published earlier this year by the Commonwealth Parliamentary Library.