Federal Court Ruling on Casual Leave Entitlements ‘Sinks the Jobkeeper Life Raft’

Published May 21, 2020 (last updated July 20, 2020) -

The Government needs to step in or risk the livelihood of thousands of small Australian businesses already struggling through the COVID-19 crisis, according to Employsure, Australia’s largest workplace advisory firm for small to medium-sized enterprises.

A full bench of the Federal Court has ruled that regular and ongoing casual employees are entitled to seek paid annual leave, paid personal/carer’s leave and paid compassionate leave, if they are working regular shifts on an ongoing basis.

While seen as a win by unions, there are fears the changes will result in more than 2 million regular casuals double-dipping into taking paid leave, while at the same time receiving 20 to 25 per cent loading at the expense of the employer.

“We need the Government to step in here,” said Employsure Managing Director Ed Mallett.

“If JobKeeper was a life raft, this decision just sunk it. Small businesses are already on their knees trying to do what they can to survive, and this could be the final blow. This potentially exposes business owners to billions of dollars in backpay claims.

“This is a landmark Federal Court ruling that will effectively roll back the benefit of JobKeeper. Every regular and systemic casual that employers have included on their JobKeeper application, they now have a leave liability for.

“If we assume that of the 6 million workers on JobKeeper, a third are employed on a casual basis, we could assume that each one of those employees are owed an average of two years of leave. That would equate to 40 days which would be roughly $6,000. That is effectively a $12 billion hole in the side of JobKeeper.

“SMEs will simply not be able to afford this liability, particularly in the current environment. In New South Wales for example we’ve seen drought, followed by one of the worst bushfire seasons in history, followed by a global pandemic. Another significant financial blow to a business could be that final nail in the coffin.

“We can’t wait for more legal wrangling on the double-dipping issue. Small businesses need certainty now, especially in the age of COVID.”

The decision has prompted the Federal Government to flag legislative changes. Attorney General and Industrial Relations Minister Christian Porter has revealed pleas by employers to make changes to the Fair Work Act are being considered.

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