Managing Through COVID-19 Crisis: Casual leave Entitlements And Unfair Dismissal Claims

Published May 22, 2020 Views: 13

22/05/20

In today’s stream, Ed gave an update on casual leave entitlements, a current hot topic in the Australian workplace relations landscape. He also looked at news reports claiming a rise in unfair dismissal claims and answered more of your questions on JobKeeper, leave and superannuation

To help your business navigate the COVID-19 crisis Employsure’s founder and Managing Director Ed Mallett is hosting live events on Facebook, to discuss the latest events, burning questions Employsure’s clients are asking and to offer business and management tips. At the end of every session, Ed will answer a few questions that come through the comment section.

Transcript

  • Managing Through COVID-19 Crisis: Casual leave Entitlements And Unfair Dismissal Claims

    Ed: Hi guys, Ed here on Friday, coming to you with all things workplace relations and COVID-19. What number are we on guys, 40?

    Stewie: Forty-eight.

    Ed: Forty-eight, I don’t think “Friends” went on for that many episodes, I would say. Sadly I don’t get paid like the guys on “Friends.” But there we go. I am gonna talk about a few things today starting off again with our structure reminder, clear, concise, and consistent, three things that I would be flattered if you’re able to say about me. And I hope that that’s providing you some good guidance as to how to communicate internally. So in the effort to remain consistent, we’re gonna start with our pivot stories, a couple of really good ones. And I suppose emphasizing the difference in types of pivots you can be going through at the moment, I’ll go through those in a second.

    There’s been a bit of an update overnight in the volume of unfair dismissal claims coming through. Some news from Fair Work on that I want to just address. Regular and systematic casuals remain a hot topic, a number of you wanting to ask questions about that. There was a real influx of questions yesterday so we’ll do another big session on those. And I just wanna give you a bit more of an insight into where I think we’re up to on the question of needing to pay casuals’ entitlements including leave. Then finally, I’m just gonna do I suppose a JobKeeper update. There’s not much new news on it, but I’m keen to hear from you about JobKeeper.

    So, pivot stories. We have had a really good email from a client of ours called Linda at…I’m gonna say Ran I [SP] and she works in retail, has a business in retail. It’s an important pivot and it’s a good reminder for us to get workplace ready. I think a couple of things I’ve noticed over [inaudible 00:02:06] is this is that we went out to a group of staff here and said, “Guys, we need this particular group of staff to be back in the office from Monday,” for reasons I won’t go into now. And as part of that process, we asked them a questionnaire and said, “Can you tell us if you are vulnerable in any way. For example, if you have any health issues that we need to know about, in order that you can come back or maybe not come back to the office depending on your needs.”

    And we were expecting probably a small percentage of people, maybe single digits to get in touch. And what we got was actually a massive percentage of people saying, “I think I’m vulnerable because” which I read, frankly, as a low desire to get back into the office. Which probably, I think is derived from a sense of fear out in our communities about coming back to work. And I probably underrate that in my mind. I’ve been living this day in, day out. We’ve got a bit of a sound thing, don’t we?

    Woman: Mm-hmm.

    Ed: I’m just gonna… Excellent. We’ve been living this day in, day out and I have been assuming that…and I have been coming into the office every day. I haven’t… Like I say I still only got one person, one client who’s been in touch to say they’ve had COVID-19. I’m still yet to meet anyone else has. I think there were two people in the whole of New South Wales yesterday that got it. So the likelihood of me meeting one of them becomes less by the day. But I’d assume that everyone else is feeling like that as well and therefore wanting to get out and get back to the workplace.

    But I think the reality is that a lot of people are nervous that they’ve been given cause of concern by the government, they’ve read information in a certain way, which might be slightly different to the way I have. And that includes my own staff. And I need to be communicating better to them, to help them understand that we are workplace ready. What we’re going to do for them to ensure that we’re going to do our very best to provide that safe work environment and help them understand that they can come back into the workplace.

    It was good reflection for me that sometimes I think I can be communicating well, but I think there’s probably been a gap there for us that we have gone back to say to people we want you to come back in but their reaction is indicated that we haven’t actually communicated as well as I thought we had. So I self reflect on that and I’m trying to improve the communication from here with those guys, and we’re doing that at the moment.

    Back to the pivot though, and Linda’s position on this. And this is the reason I’m talking about communication and making people feel comfortable. So she works in a retail environment. One of the risks in retail environments is this, is that a lot of retail stores basically closed down on the basis that… It’s still not working?

    Woman: [inaudible 00:05:11]

    Ed: They closed down on the basis that they were just worried they weren’t gonna get the footfall and the traffic and so forth. That meant that they weren’t gonna be able to do the business, the costs of being open were too high relative to the revenue that they’d achieve. And, there’s this awkward moment that now where people are getting encouraged to get back to business and there’s still those risks.

    So, in retail, you have two problems. You have to persuade your customers that you’re doing the right thing and have customers come in. And second, to that, you also need to persuade your staff that you’re doing the right thing, so they’re willing to come in and work as well. So what you’re seeing in a lot of retail environments is quite significant workplace-ready steps being taken, quite visible workplace-ready steps being taken. One of which is putting up screens and things around tills.

    And what worried me about that, I suppose was the cost that it was gonna cause business in that, they were gonna have to spend time going out not only getting consulting and expert information on this, then there were gonna be a whole load of impractical solutions given to them by consultants who said you need to go and spend huge sums of money. You probably have to wait significant amounts of time before you can get your workplaces open again, rather than just being pragmatic, moving quickly and remembering that the rule in health and safety is to provide a safe workplace but that’s subject to being reasonably practicable to do so.

    And what Linda did brilliantly they went out, bought a little bit of perspex themselves from Bunnings, got on with it, stuck it up. And she actually sent me a picture that we’ll share on our social media, which shows that they’re a heck of a lot better at crafting perspex than I would be. But they just got on with it and didn’t spend a huge sum of money on it. But they’ve achieved the practical purpose to get on with being a small business and not reading newspapers that today tell us that you need to start getting fancy decals on your floor and other things that cost huge sums of money, rather than just getting on with it. So well done, Linda, for being workplace ready and getting cracking.

    The second pivot I want to mention is a client I won’t mention by name I’m just gonna say broadly that it’s a medical practice. And it was flagged that the pivot there that I thought was really interesting was the desire to move forward with management and what they have learned during the COVID-19 crisis. And I think a few of us will have learned this is that there are pockets of people who have been languishing in their business for too long and who have not been contributing in the ways they should be just haven’t grappled the issue. We’re all guilty of that, as managers.

    There’s this great phrase I read in a book by a chap called Marc Benioff, who founded a company called Salesforce which some of you might use, a CRM company. And his litmus test on this management point is this. He said that if someone walked into your office today, walked into your workplace today and resigned to you, and you wouldn’t regret it, you’d be pleased in some way, then you should have acted earlier. And I think that’s a really good litmus test that I try to remind myself of. I don’t always follow it.

    But in essence, what I got from this client was saying, you know what, COVID in its own way has made me pause and reassess things like, well hang on a second, if I’m gonna apply for JobKeeper for people and I’m gonna be handing over that money, these better be people I actually wanna retain. And it made her in this case, understand which people she wants to retain and which she doesn’t. And she’s consequently taking actions based on that.

    And one of the things we see as a business in our client base is the huge amount of money that gets wasted and spent on staff that aren’t doing the right job for you, aren’t actually helping your business move forward, have become a square peg in a round hole, have become a proverbial pain in the behind. And you just carry on paying them out of some sort of inertia to keep someone around because you just don’t wanna wrangle with the problem, either because you think they’ll be hostile or because actually, just having a difficult conversation with someone is hard, and you don’t know how to do it.

    So I was really pleased to see this update from this particular client that says, “You know what, it’s just given me the gusto to go ahead and have those difficult conversations, which I’m now having in order to get my business ready, workplace-ready, but not just by putting things, sticking tape on the floor to make sure people are distancing, but actually looking critically at my staff and saying who is it that I need to be here now we’re moving into this tighter, leaner period of working.”

    Okay, those were the pivots. I’m now going to just give you a brief update from Fair Work. So I saw overnight quite a bit of media saying that Fair Work says unfair dismissals have gone up by 70%. Again, for what it’s worth, I’d say I’m not saying that yet. I’m still not saying it. So they said 60% last month, 70% this month, I don’t think they’ve got any particular self-interest in making up numbers although I’m not suggesting that in any way.

    But we do for our client base we respond to more Fair Work claims than anyone else would do. So our volume of clients of 27,000 means that we see…roughly speaking, we see about 40 to 50 claims made against our clients a week. And that number has gone up slightly but it’s gone up by about 15%, 20%. It hasn’t gone up…to say that it’s gone 60%, 70% would mean we’d go from our 40 odd claims a week, up to 70 odd a week and that hasn’t happened. We’ve gone from 40 to roughly 50, if that.

    So yes, we’ve seen an increase. I suspect it will increase more. We haven’t yet seen any sort of floodgates in claims. Interestingly, I may have said this on here before but when I was working as a barrister doing employment law during the GFC, what I saw in the U.K. in this was, was actually unfair dismissal claims went down. And the people getting dismissed, sort of looked in their neighborhood also were being dismissed and said, “Maybe we’re all just getting dismissed, I’m not gonna sue for it.”

    But you did get an uptick in discrimination claims during the GFC. And it may be that you start to see things like that here. But at the moment Fair Work is saying unfair dismissal claims are going through the roof. But as I say, I’m not yet seeing that and it seems nor our clients as a consequence.

    So moving on then from that update from Fair Work, one area that you might be seeing claims in the coming weeks is this casual point about leave. So there’s a lot of shock and disbelief, I think yesterday at the decision coming out. We ended up doing quite a lot of media yesterday with various media outlets just fascinated by how big this decision was. And it’s not to be underestimated. It’s huge. It’s huge in the sense that everyone thought it would go the other way I think, to the extent I’m sort of seeing those who might traditionally be in favor of what just happened, even they don’t really have a very convincing argument as to why it did happen or why it’s a good thing.

    In fact, I think that this is something that’s frankly a lose-lose for employers and employees. If you think about it from the employees’ perspective, you’ve just seen and we saw in the media today, they think the actual unemployment rate is a horrifying 15%, which is just amazing, in a terrible way. So they’re seeing at employee level that their friends and family and others are losing jobs. And if you’re a long term casual, you’ve just been told that you have become a heck of a lot more expensive to your employer.

    Now your employer is gonna be taking their head out of the JobKeeper sand imminently and working out their costs going forward, which may well and I suspect will lead to big rafts of reduction in headcount, potential redundancies, as we come towards the end of JobKeeper. That’s certainly what we’re predicting here.

    And when they do that, they’re gonna have to be looking at who their most expensive staff members are. And someone that gets paid 25% loading as a casual, and you’ve just been told, you’re meant to be back paying them for leave and so forth, and going forward, you’re gonna have to pay them the 25% extra plus leave, that to me, I’m not condoning it, I’m not suggesting it but in reality, is gonna cause those people to be pretty near the front of the queue when businesses come to considering their costs. So that’s not a good outcome for someone who’s a regular and systematic casual, particularly someone that has chosen to do that on the basis they like the flexibility, they like the ability to say no to work, and that you don’t have the ability to say they must do it.

    And it may not, because they’re regular and systematic, they may not be doing that on an ad hoc basis, but they might for example like taking periods of the school holidays off to be with their family. They might wanna take more than four weeks off a year, which is the National Employment Standards requirement for their personal reasons. And suddenly you get in a situation where leave, which is something that you have to ask for and have approved by your employer is something you no longer have the right to do because you’re…sorry, you previously were able to do it without their approval. And now you’ve gotta seek approval of your employer, which might be a terrible thing for you, frankly.

    So I think it’s a naff outcome for employees. I think it’s a naff outcome for employers. It’s a very worrying outcome for employers. And the reason it’s worrying is this is that it may not last forever. We may see this decision appealed. It may be that somebody might have read in the paper today that the government seeks to pass new legislation to change how things work to try and get around this problem for businesses. It’s not just us saying that this is a big, big problem for businesses, just by everyone saying in the media today that, you know, big superlatives being used, people calling it a catastrophe. I saw an article in the paper today by a restaurant owner saying he can’t see the point in opening up anymore, all of these things starting to come out at the worst possible time for business.

    And the law may change. If it does, it’s not gonna happen next week. There’s no way. The Labor Party is saying that they agree with the decision. So if the government tries to push anything through to say, let’s change it, it’s gonna be on a contested basis, and they’re gonna have to try and work out how to get any of that legislation through the Parliament. That could take months if not years.

    Equally, going off to the high court and appealing this would also take a significant amount of time, and probably way more time than it would take an employee to sue you for any outstanding leave or any accrued leave that they weren’t paid at the end of their employment at any time over the last six years. Indeed, coming and knocking on your door and saying, “I deserve paid leave going forward,” all of those things, you’re not gonna have a legal defense to until the status quo changes. So there’s a real risk you’re gonna find yourself wrangled up in claims at the moment.

    I mentioned yesterday that there is one way that…I was about to call it a clever way but that’s a bit self-congratulatory having thought of this yesterday, so I’ll just call it a way, a way to potentially deal with this and that is that if you are a business that is JobKeeper eligible and you have regular and systematic casuals who are eligible and currently getting JobKeeper but not working, I appreciate that might be quite a narrow field, you could potentially write to them expressing that you’re not admitting that they are entitled to leave, but in the event that it was determined by a court of law that they were bearing in mind the recent decision, and I don’t think anyone will be criticized for pointing this out and trying to hedge their bets, you are going to request that they go on annual leave. And you would then use the JobKeeper not just to give them a $1,500 top-up for nothing, which is happening to a lot of regular and systematic casuals that are not doing work at the moment, but giving them the 1,500 bucks top-up to pay down their leave accruals that they have accrued with you in principle because of this decision over the recent years. Subject to, of course, you can’t take them below the two-week mark under that JobKeeper direction.

    But anyway, there’s a bit of complexity there. I’d recommend anyone who has potential challenges from regular and systematic casuals I’d be urging just to get some advice, honestly. I’d love it for you to call Employsure, I’d love for you to come to us if you’re a client and get some clear advice on this. But whatever you do, just get some advice because there is a real risk here that as I said yesterday, it’s been described that JobKeeper was a life raft to our businesses. And you only need to see the relief that we hear from business owners in getting their JobKeeper on here.

    But I really do believe that that decision, just put a hole in the side of the life raft. Now we’ve gotta quickly patch up that hole, guys, otherwise, we’re gonna see some businesses sink. And we want to try and play a part in solving that for you. So if you’re clients, give us a shout. If you’re anyone else, and you need some help with it, do call up and let us know and we’ll see whether we can analyze the problem for you. And look at whether solutions like using JobKeeper to pay down potential leave entitlements might work for you.

    So there’s my bit on the casuals decision which I think will remain front of mind. I can tell you now that this is something burdening small business. The amount of people viewing this live today is up by about 30%, 40% from over the last few days, which tells me how much you guys are worried about it and rightfully so. So let’s get that particular problem sorted. We’re here to solve it. It is a problem but it’s not insoluble. Let’s try and get through it and work out what to do for you.

    So then just finishing on JobKeeper, so the final fortnight in May has just…will finish this Sunday. So you’ll start making your payments if you haven’t made them already, over the course of next week. There’s some confusion with the ATO website. Again it talks about having had to have made the payment in the fortnight. Our advice to businesses has been to make sure that you just carry on paying in accordance to your normal payroll. You can’t be expected to pay in the fortnight when you don’t know how many hours people have completed during that fortnight and so forth.

    So if you’re doing your payroll next week, do it then. The issue will be whether when you come to make the JobKeeper application, which I’ll also do as soon as possible next week, to get the payment as soon as possible, whether you’ve actually come to pay your staff and you will have done that by then.

    So, any shoutouts from anyone that hasn’t had JobKeeper yet I’d be interested to hear. We’re coming towards the end of the month, most of you that are going to apply have applied and would have done that 14 days ago or more. So if anyone is worried about JobKeeper, if anyone’s heard from the ATO on JobKeeper and been told they’re not getting it, I’d love to hear from you so please shout out if you’re willing to do so on here. Right, Stewie I don’t think anyone is tuned in to hear from me. I think they’re here to get some questions answered on casuals.

    Stewie: That is definitely the sentiment coming through today.

    Ed: Good to know. What, that they don’t wanna hear from me? [inaudible 00:22:08].

    Stewie: The latter part. And this will set the tone I guess, from Debbie, she’s a client from Chakra Proprietary Limited. “With regard to the casual court ruling we have a lot of casuals that are systematic. They have been offered the opportunity to go permanent after 12 months but decided not to, and even signed Employsure paperwork to say so. They also have casual contracts. Say for argument’s sake someone does take this further and wants annual leave, are we then going to also have an issue with the permanent staff who are paid less to do the same job, therefore we have an equal pay issue with the permanents and the problem with the casuals wanting annual leave? This is an absolute mess.”

    Ed: It is a mess and I totally sympathize. And don’t take this as me sounding like I’m ass-covering in any way. You’ve done all the right things in getting the contracts in place, getting the documents signed when you offered them permanent work and they said, no. All of those things could go to an argument that these guys are not regular and systematic. There’s not the expectations there to suggest that they are regular and systematic. They for some reason, have decided they didn’t wanna go permanent when offered. So you try and stack up that argument. So if they came to you and said, “Give us leave,” you’d say no, these are the reasons why you’re not.

    But none of those documents are unfortunately definitive. And the reason why is you can’t contract out of the Fair Work Act out of the National Employment Standards. So regardless of how many bits of paper you have in place and how good those bits of paper are, that decision means that basically, if those people, notwithstanding all that, are regular and systematic, they can still come forward and argue that they should be paid leave. You’re spot on that you then have a problem with your full-time staff potentially saying, “Hang on a second. These guys get paid more than me now as a result. Why don’t you give me more pay?”

    And whether there’s potential issues flowing out of that in terms of equal pay issues, there is stuff like that would need to be looked out on each case. But it is a mess. And the more you think about it, the more mind-boggling it is, to be honest. But the best thing you can do as a client, is give us a shout, Debbie, or we’ll give you one, and we’ll work through this person by person.

    I would say this, I’m making the point that we as businesses sort of feel like we stitched ourselves up by nominating regular and systematic casuals. That nomination on its own is not 100% definitive that you wouldn’t be able to argue that, in fact, these guys shouldn’t be getting leave and so on. You can still have a crack at arguing it. It’s just when you’ve got this balance of evidence as to whether they should be entitled or not, on the one hand, you’ve got the sort of things that Debbie is saying that she’s asked them to be full-time, they’ve said, no, I’ve got that documented. All of that goes on one side.

    On the other side, a big throbbing bit of evidence that you seem to accept that there’s some mutual commitment to do work, which means they’re not casual. You’ve just told the ATO that they’re regular and systematic.

    Stewie: And Ed, I’m assuming this one is directly related to the court ruling from a couple of days ago. From Veronica, she’s a client. Can you please confirm if for the purpose of the casual annual leave does this only apply to casual workers who work 38 hours consistently or is there a pro-rata rule for one who regularly work, say 15 hours?”

    Ed: The latter, pro-rata. It has nothing to do with being full time. It’s to do with how regular those hours are and what basically the mutual commitments are between the employer and employee.

    Stewie: Emma says, “If there was a clear definition of regular and systematic it would help things. Does it mean that a casual would have to be available when you need them, work the same day each week? I’m still very confused.”

    Ed: Spot on. So the regular and systematic test, you’re right, should be clarified. And I think that’s one of the ways that if the government does intervene, and we urge them to do so, that they’ll look at defining it. I think the other way they might do it is to say, actually, what we wanna do is create a more rigorous version of casual conversion, which says, basically, if after a certain period, you’ve been a casual on these hours, you can choose to become a full-time or permanent employee. There may be some tinkering with that to say that if after a certain period you have done that you do become a full-time or permanent employee or something like that.

    But you’re right, another way of sorting it out would be some clarity about regular and systematic. The best clarity I can give you and we gave in terms of the ATO applications is if there’s a mutual sense of obligation to both give and do the work, then they’re probably regular and systematic. And the litmus test that I used in that regard is if the person didn’t do the shift or declined the shift or you didn’t offer them the shift would either of you ring the other one and say, “What the heck. I rely on that shift each week. Why haven’t I got it?” So it’s not about the amount of hours. It’s about those mutual obligations.

    Stewie: From Tracy, “A permanent employee has resigned with the correct notice period. They’re on JobKeeper and wondering if we still have to pay JobKeeper top-up, or only the actual hours worked for the last week of employment. Their annual leave entitlements will be paid up.”

    Ed: You have to pay the top-up. So let’s say they only did an hour in that particular JobKeeper fortnight, you wouldn’t just pay them for that hour’s work, you’d have to pay them the whole $1,500 because they’ve worked for a part of that fortnight and you’d get all of the $1,500 back for them.

    Stewie: And just a note coming here, Ed, we’re getting some people saying that, yep, they still have not received JobKeeper.

    Ed: Okay. What we’ll do is go through and reach out to each of you just to…with our team here and just say, guys, no cost, just to say, let’s prod and poke a bit, see if we can help you as to what might have happened there and we’ll find out. If you shout out on here, if you’re watching and you haven’t got your JobKeeper yet, and you’re worried about it, just shout out say yeah, I’d like a call from one of your guys to see whether I’ve done the right things.

    Stewie: In relation to the casual situation, Helen says “Can a past worker approach the organization about this entitlement that they were not paid?”

    Ed: They can, hell yeah, just as a past worker that’d say you’d underpaid them by paying too little an hourly rate could do. Typically the limitation period goes on for six years. So after six years, you’re somewhat safer than before. But yes, that’s actually probably the main risk. So if you think about a current worker would be saying, okay, I didn’t realize I had all this annual leave but I have never taken annual leave so you owe me four weeks for every year that I’ve worked for you. I’ve certainly worked for you for 3 years, I’ve certainly got a 12-week entitlement. You don’t have to suddenly pay that out then.

    But it does mean that they could either start asking for paid leave or… And this is why it’s particularly problematic in the moment. If they were dismissed over the coming period or resigned, you would then have to pay out the 12 weeks. For the ex-employees, that’s the risk is they come back and say, “Okay, oh, you should have paid me that out when I left and you didn’t so give me the money.”

    Stewie: Okay. And again, another lens on the definition of systematic. Sam says, “What’s considered systematic casual? I’ve got a casual who works two to three days during uni and four to five days during the holidays.”

    Ed: So there’s a good chance that person could be regular and systematic. Again, it’s having that sense of mutual obligation. It doesn’t matter that the hours change a bit, and so forth. At its core, there may be some regular and systematic hours as to you having this mutual obligation where you’d call each other and say, “I expect you to do that,” and you expect me to give you that work. And really what the court said was that that’s not a casual, that’s someone that’s got a permanent engagement by you.

    Stewie: And you’ve touched on this many times over the last few weeks Ed but this time from Harvey, he’s a client from APR. “I have an employee who is on sick leave with no entitlement left, that is leave without pay. Now he is on JobKeeper. Do I have to pay super on the JobKeeper portion as if he wasn’t getting it he would not be receiving super?”

    Ed: Hi, Harvey. Thanks for your business. The answer is no if they’re on leave without pay at home, then all you’re doing is topping up so you don’t have to pay super and that you can choose to pay on top of the $1,500 but you don’t have to.

    Stewie: And this from Laco [SP], “My staff who is on JobKeeper has another casual job. I asked her to work but she refused saying her working hours for the other job is in conflict with our working time of day. What do I have to do?”

    Ed: It didn’t say whether it was a permanent employee for her, but…

    Stewie: It did not say, just another casual job in the other place.

    Ed: So if the hours that that person would normally do for you, you’re asking them to do those hours, then you can put your foot down on that. But if you’re saying, I’m asking them to do some other hours and they happen to have another job elsewhere, then it may be that it’s not reasonable for you to ask them to do those hours. So you just need to explore… Well, I’d need to know whether the hours that you’re asking her to do are the normal hours or not.

    Stewie: This from Christine, “What you said Ed yesterday got me thinking. Can I use JobKeeper to pay some long service leave out for a long term casual just at the top-up amount, of course?”

    Ed: Yes, if they agreed on long service leave. Assuming they’ve got…as a casual in most states, you do get long service leave even as casual.

    Stewie: From Manuel, “Does this new legislation…” his word, “mean that long term casual workers can claim annual leave from the time they started working for us or from now onwards? If it wasn’t hard enough at the moment in hospitality we now need to cover this annual leave too. It makes us reconsider why we’re even running a hospitality business.”

    Ed: Manuel, I totally empathize with that. The answer is it goes backwards. So the presumption is that it’s not that there was a new law as of two days ago, it’s that they clarified the existing law. So on clarification, basically, the fact that you haven’t paid leave to people all the way back six years means that you now owe that period, so it’s not just going forward. So it’s not that you could say, for example, okay, clean slate, I’m not gonna employ regular and systematic casuals going forward, you’ve gotta back pay liability.

    Stewie: Rachel says, “If a full-time staff had been asked to take two days annual leave each week during this quiet time do they still accumulate annual leave based on a three day or a five day week?”

    Ed: So if they have been taking annual leave during and that was the agreement between you then they’d be accruing based on five day week.

    Stewie: From Saskia, she’s a client. “I just had a question about reimbursements, with everyone working from home, should the company be providing employees with an allowance for internet, electricity, etc., or is this something people should claim on their own tax? What would be best practice?”

    Ed: A really good question. We’ve wondered that here as well. And the ATO came out a few weeks ago now and made a clarification that the employees can claim tax deductions through their own tax. And so the best thing to do is make a clear position in your company. Some companies might choose to make a contribution, others would do, as seems to be recommended by the ATO, which is say to the employees, this is a position you can seek to make a claim on your own tax.

    Stewie: And interesting one from Nicole. “Should we be moving all our casuals to part-time until this mess is sorted out?”

    Ed: You could try subject to what your award says and subject to their agreement. You just can’t force people to do it, unfortunately. So, not least, because what it would mean is a reduction in their pay, because they’d no longer get the casual loading on it. So a lot of people will say no to it. And I think that’s at the heart of the decision, really, which is, I think the decision presumes that people are kind of somehow caught up in a casual environment and don’t wanna be there. The reality that we hear from you guys is that a lot of people want to be casuals and even when you’ve offered them permanent employment, they say, “No thanks.”

    And that may be because they are getting the loading and they’ve worked out that they don’t take the four weeks leave a year, so they’re getting work more or whatever it might be. But they’ve got their own reasons for wanting to be a casual and often will say no when you offer permanent employment.

    Stewie: Okay. And Ed, in that response, you basically cover off around about 10 questions that are on exactly the same question so clearly, that’s a narrative coming through. From Tracy, “Can casuals that have left put in a claim?”

    Ed: Yes, if they…not just any old casual, but if it’s a regular and systematic level casual, they could certainly put in a claim. You should hear about it before they do. They should knock on your door and say, “Hey, I believe this, you owe me some money.” My worry is and I think it’s a reasonably low worry seeing these big class actions against big labor hire companies and things like that, but whether any lawyer start doing no win, no fees and things like that, chasing after this money, that’s a bit of a concern.

    Stewie: And Ed, you did touch on this just a little while ago, but asked a slightly different way this time from Sue. “Is it only casuals who work the equivalent of full-time hours or is it casuals that regularly work three to six hours per week?”

    Ed: It can be the latter yeah, so it’s on a case by case basis, but there’s no requirement of being full-time.

    Stewie: Julie says, “Do we know if there is a time frame from when their leave accrual should start? For example, would it start from when their employment started, or is there going to be a set start date for all employees? Just wondering in the event, we decide to pay down JobKeeper payments.”

    Ed: So it’s another good point in terms of the ridiculousness of the decision really. In law, what should happen is that the accrual starts from the moment at which they become regular and systematic that those mutual obligations exist. And that might have been on day one of their employment, but quite often, it will take time for those obligations to build up. So one of the things you might as an employer engage on a casual basis so as to see whether they’re any good or not, and you don’t wanna have the restrictions of a permanent employee if they’re not, so it may take time for that person to go up to that position.

    But basically, what you’re gonna need to do is go and look at your position on each employee, and determine when do you think that happened and build up a case as to why that is or why it never happened, maybe. And maybe even if you’ve applied for JobKeeper for them, you say it still never happened. But in the circumstances, we did this, but in reality, when you look at it, the test in the case, it wasn’t exactly the same test as the ATO you’re using and sort of arguments like that. But you need to start proactively looking at each potential liability that you have.

    Stewie: An interesting one from Gail. She says, “What if your casual employees are not chasing you for leave pay or any changes?”

    Ed: That’s a really good question. So I’ve been mulling over this. So if they’re not coming to you with any leave pay or change, I’ve got a couple of decisions. I tend personally as a manager to not sort of just sit there and hope that never happens and that no one is gonna come and maybe they haven’t read the paper. Maybe no one’s encouraged them to do it yet. What I would tend to do personally as a manager is get in front of that narrative. I try to. I try and explain what the decision meant, and what that meant for individual employees and what stance you were taking on it.

    And that stance may be, for example, we believe that it’s too early to do anything. The media is saying there’s gonna be law changes and government intervention. We need to pause and look at this. In the meantime, we will be taking advice on whether each one of you is regular and systematic or something like that. Putting it in a holding pattern is one way of dealing with it. The other is if you want to stick your head in the sand. Probably the third way is to start paying things out straight away. But I wouldn’t recommend that either. I think there’s too much to work through first. I saw a client I think called Emmanuelle say that she tried to get through on our phone line but it’s not working for some reason.

    Woman: [inaudible 00:39:14].

    Ed: Emily is it? Sorry. So yeah, we’ll give you a callback Emily. Sorry about that.

    Stewie: Okay. From Helen, “I have a question on the JobKeeper application. I received it okay with the number of employees being pre-populated when I went to identify, but nowhere has it asked me the employees’ names. Should it have?”

    Ed: Good question. I’m going to give away that I’ve not been stuck into the system as deeply as that so I don’t know the answer but if you’ve received it probably not. But I’ll ask and we’ll respond to the guys that have been dealing with that.

    Stewie: From Selena. “We haven’t applied for JobKeeper, but we’re only eligible for May as the income hasn’t dropped enough until now. So am I right that we only have to pay JobKeeper for May? I have 2 casuals that haven’t been rostered on since March 15th so they’ve filled the forms in and are requesting the $1,500 a fortnight but again, is that just from May onwards?”

    Ed: It is if that’s when you’re applying for eligibility from, yes. So you do the May fortnight.

    Stewie: And this is a classic myth popped up every time the last few weeks, this time from Penny. “With the casuals getting the extra loading could we seek the overpayment back if we are forced to pay holiday pay?”

    Ed: Sadly, not. That was one of the big I suppose…I don’t wanna be too negative about this. One of the extra body blows from that decision was very much expressly said that you can’t set off the sums paid in that regard. And the reason for that is it basically says you’re not allowed to come to an agreement to exclude these fundamental rights for employees. It doesn’t matter that they’re getting paid more as a casual. You can’t use it to settle.

    Stewie: Okay, this is from Melissa. She’s a client, Clancy Contracting, “With the new ruling on casual employees can we use the loading that we’ve already paid on the casuals’ wages to offset the annual leave that will be owed to them with this new ruling?”

    Ed: No, Melissa, thank you for your business, but no, unfortunately not. So the only… Sorry just to clarify was that a suggestion that they’re paying at casual rates or rather…?

    Stewie: It would suggest they’re paying on casual wages.

    Ed: Yes, so if you pay… So there’s a possibility. We could speak to you individually as to the actual rate you’re paying. In case you’re paying well above, maybe you’ve got a set-off clause over and above your award rates. What you wouldn’t be able to do is go below award rate in order to satisfy the leave thing. So it would be interesting to have a look at your contracts and understand the specific rates you’re paying.

    Stewie: From Selena. “We have a casual who does our combination bookings on an as-needed basis. She works at home and a time suitable to her and as our business has worked for her to do. There isn’t a regular time that she works, that is no 9:00 to 3:00, for instance, but does do an approximate regular number of hours each month, would she now qualify for the annual leave as well?”

    Ed: Possibly is the answer to that, not definitely, possibly. She sounds like that person could be a contractor. So given her little control you have over when they do the work, and so forth, so it might be something that you need to get advice on as to whether they’re an employee in the first place.

    Stewie: From Comulan [SP]. “I have casuals on hire contract under 12 months. Are they entitled to annual leave and/or personal leave?”

    Ed: When you say they’re on hire contract, so I don’t know whether that means you’ve got them from a labor hire company or not. But it depends on where the employment relationship is, first of all, whether it’s between you and them or them and maybe a labor hire company. But let’s assume they’re with you, the 12-month mark is not a magic date in terms of whether they start to accrue leave or anything like that. Twelve months might be an indication that they are regular, and they’ve got this consistent work. But it could have already happened depending on the hours they’re doing.

    Stewie: From Tabitha, “When they say four weeks annual leave is owed is that at the average of their weekly hours? Surely it’s not based on a full-time week’s pay?”

    Ed: No, it’s based on the days that they work. So you would get four weeks off the days that you work.

    Stewie: Michelle says, “If casuals have to be back paid how far back? You mentioned six years. What if someone has worked casually for 15 years or more with the same company?

    Ed: It’s not entirely clear. I said not entirely clear on that because the limitation rule is it should only go back six years, but there are ways in which you could argue again to try and get the full 15. But possibly six…sorry, possibly 15, probably 6.

    Stewie: Interesting one from Megan. “So, technically, if someone declines to go permanent part-time and wants to remain casual, does that absolve us of liability for leave?”

    Ed: Sadly not. No. Sadly madly not. If someone’s chosen…I mean, why would you choose…I suppose you didn’t know this decision was coming out. But why would you take a pay cut down to part-time rate where you can have your cake and eat it and take higher rates and get holiday at higher rates as well?

    Stewie: Shirley poses this one, “What if a casual works systematic hours for more than one employer? Are they entitled to entitlement from both employees?”

    Ed: Yep, at the moment.

    Stewie: From Rose. She’s a client, AFM Services, “Aren’t they double-dipping? I thought the hourly rate that’s inflated for casuals is specifically to accommodate not getting annual leave. Is the calculation back paid on the base rate and calculation made less on the inflated amount?”

    Ed: So you’re right, Rose, they are double-dipping in my view. But that in this decision was said to be okay. You might have read in the papers that the Shadow Minister of Employment has been, I think his name’s Tony Burke, has been saying that he sees it as employers double-dipping by getting people without job security and getting a full-time worker essentially. But I think it’s the employee double-dipping, but the court has said that that’s acceptable. And essentially, they would get paid at the enhanced rate that they’re meant to get paid as well so it’s almost triple-dipping, really, if you think about it that way.

    Stewie: And this plea from Timothy, “So just to be 100% clear, a few casual staff members were employed on a regular basis for 1 year who we terminated in mid-2019 are now entitled to leave payouts? Sorry, it certainly sounds like this is the case. I just wanna be 100% sure before I start crying.”

    Ed: Yeah, I’m gonna stop you from crying, unfortunately, 100% sure that it’s not really a way that this works, which might actually make you more frustrated. But it depends on how regularly and systematically they worked for you. Yes, they could have some entitlements that they could come and ask for. I wouldn’t recommend you rushing off and saying here you go and so on. You would need to look critically at whether those casuals really fit the definition of the type of a casual who accrues leave.

    Stewie: And Ed, this from Joe just asking for…posing this question. “Hi, Ed. Who’s to prove that the employees were systematic and regular?”

    Ed: So what would happen is this is that the employee would go to the Fair Work Ombudsman or a lawyer or someone who would then go to the Fair Work Ombudsman for them. And the Fair Work Ombudsman would look at that as some sort of mediation process with you. If you couldn’t come to an agreement, you then end up with the employee making a claim in the courts and the judge would decide.

    Stewie: Interesting one from Sharlin. “Two years ago, I paid a casual a bonus to cover what I would consider leave as she had worked very hard over Christmas. Can I consider this leave now?”

    Ed: What they’re very clear about is you can’t use sums that you are otherwise getting paid under your basic employment rights to set off. Some people have agreements to say basically if I’ve got any other underpayments going on, and I’m paying you well above your basic employment rights and I can use those to set off, that’s less clear. So possibly that bonus could be used.

    Stewie: This from Greg and Bernie in Cairns re casuals. “Could you calculate the cost of the annual leave owing and deduct from this amount the 25% overpaid over that period of time to work out the net amount owing?”

    Ed: No. I’m always interested by Greg and Bernie’s whether they rotate, whether Greg watches one day and Bernie another, or whether they’re watching together. I don’t know. I’d be interested to hear. No, you can’t do that unfortunately. That would be a logical way to avoid double-dipping, but that’s not the way that you’re being allowed to use it.

    Stewie: From a business called New Perspective. “What happens if you can’t back pay casual staff and you need to close your business, what happens then?”

    Ed: So, unfortunately, if you did have to wind up your business, you’d go through an insolvency process. And if you had any outstanding liabilities with staff, then they would join the queue of people that were potentially owed money.

    Stewie: This is from Glenn. “So does the court decision also remove the casual loading that employers need to pay? Are the awards being reworked?”

    Ed: Not at this stage, no. So basically that argument was made in this case and the argument was no, that’s what the casual loading is. That’s what you decided to do. But no. Whether that changes in the future, we’ll have to wait and see.

    Stewie: From Sarah, “Hi Ed. What are the chances of appealing against the court decision? If so, who will most likely be filing the action?”

    Ed: So it would be the company that was being sued so it’s a company called WorkPac, which is a labor hire company based out of Queensland and they would file the appeal. If they filed the appeal, the government gets the right to sort of piggyback the appeal and say, “Hey, we’re interested in this. We’re also going to turn up and argue about it.” But the government can’t do it on its own. They have to wait to see if WorkPac will do it. So there was actually a decision a year or so ago, that went against WorkPac as well on this. This is the second time this point has been made, but we were all in limbo waiting to see.

    We all thought that this decision would go the other way but it hasn’t. It has gone the same way as the first decision. And WorkPac didn’t appeal the first one because they decided to do this instead. And I suspect they’ll have a crack at appealing this now but I don’t know. And if they do, the government might jump in. If there is no appeal, then the government might decide to try and amend legislation anyway. But we’ve already heard from Labor that at this stage, their position would be that they’d resist any attempts to change legislation because they like the decision.

    Stewie: This is from Joe and Karen. “How do I justify to my permanent employee doing the same job as my casual employee the 25% loading difference paid to my casual?”

    Ed: It’s interesting. It’s not that dissimilar to the problem that we’ve seen with people saying what do I do with the employee that was doing a couple of hours and getting JobKeeper top-up versus the person who has to work for it? It’s a similar thing really in terms of a management tip is open, transparent communication. It’s a tough decision guys. We’ve just been hit by it as well. I’m not saying it’s the right decision. I’ll try and speak reasonably to the casual about their ongoing employment and whether we can move them on to a permanent basis and try and even things out, they don’t have to agree. But I’d be keeping open with your conversations with your people.

    Stewie: This one from Graham, “Does it make a difference if the casuals are paid significantly above award?”

    Ed: Possibly, Graham to be honest you’d need to have a look at the contractual arrangements between you.

    Stewie: Jenny asks, “Should we be acting on these changes to casuals now or wait until the possible court appeal decision?”

    Ed: I would be waiting at the moment but the question is really do you wait by burying your head in the sand and hoping your employees haven’t picked up a newspaper today, or do you go out and speak to them? My tendency would be to go with the latter. But making sure you craft that conversation very carefully about what you’re actually doing and when they can expect to see anything if ever. The idea would be to try and avoid them being prompted and prodded by maybe a no win, no fee, lawyer who is gonna come and knock on your door instead.

    Stewie: This from Jules. “So if you offer to change the casual to permanent and they refuse, and you as a business can’t sustain the casual payment plus the leave, and you terminate their employment is that unfair dismissal?”

    Ed: It would be if you refused and then terminated on the basis you’ve just described. What you might need to do is look at your cost and your business, maybe you need to look at rearranging your business, you possibly have a redundancy situation. One of the things that hasn’t yet been said about this in any real terms, but because these are casual employees that are no longer getting looked at as casual you end up having to pay them notice, potential redundancy pay and other things like that, so even to terminate them becomes a lot more expensive at this stage. But you couldn’t terminate them for trying to exercise their employment right.

    Stewie: And just to probably wind up this session Ed just on the casual questions, this might be as good as any to finish on. Judah says, “We had a regular and systematic casual who left their employment two years ago. Is there a risk now that this person can claim up to six years annual leave?”

    Ed: They could possibly come to you and seek…they basically have six years to make the claim from the date of the underpayment or non-payment. So they could come up to you for a number of years, yeah to come and ask for that money.

    Stewie: And just to change the tone completely, we have to finish on this one from Simone. “Thanks for all your help, Ed. My question is more about business in general, especially entrepreneurship. It seems 2020 has just been crisis after crisis. What are your thoughts on being an entrepreneur/leader in these times?”

    Ed: I read something this morning just about encouraging leaders not to try and sort of do great, big blue sky thinking. I’d be careful about limiting your vision in it. If you’ve got ideas, there’s often just great opportunities during disruption like this to execute on them if you can find the funding for it, and so forth. But my view is in the things I’m looking at in terms of opportunity as I’ve talked about that, that pyramid of types of business where the bottom of the pyramid is those services and things that are fundamental to us that we carry on needing through anything, crisis, good times, etc. The top of the pyramid are those things that are sort of luxury, nice-to-haves. And then the middle are the things that are good to have because they help us out day to day and so forth.

    So I’m looking personally at opportunities that settle on that bottom rung. I think it says the top ones, the sort of nice to have, because I’m sort of slightly curious, you know, everyone suddenly started working in a start-up and solving problems that didn’t really exist for businesses, I don’t think…that’s not where I’d be trying to look. But to be honest, I wouldn’t have been trying to look at those things even in the good times I much prefer those businesses providing solutions to problems at that bottom level of the pyramid.

    Stewie: And just a couple of comments if I may. Just to finish off on what’s happened over the last 24 hours. Heather says, “JobKeeper seems like a walk in the park now compared to this.” And then Leanne says, “This is sad for casual workers too. I see lots of casuals suddenly out of a job, more stress for Australian families on both sides of the fence.”

    Ed: Spot on, I think, yeah. It’s a shocker. It’s a shocker. I’m grateful to get that vote of thanks but it’s one of those ones that feels like a bit of a, literally and metaphorically a bit of a cloudy day for business today. I don’t feel like I’m the bearer of much good news today. Good…well, not good, but thank you, guys. I shall see you on Monday with no doubt more questions about casual workers. See you then.

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