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Have you checked your organisation’s employment contracts and letters of offer? New regulations commenced on 18 December 2018,1 allowing an employer to make a claim to have a clearly identifiable “casual loading” taken into account if an employee makes a claim for payment of NES entitlements because they were not a “true casual”. However, stringent conditions must be met. Although this might mean that some employees will not be able to ‘double dip’ on the casual loading, these regulations (at least until tested by the courts) are not a complete resolution to the issues raised in Skene v Workpac Pty Ltd. 2 (“Workpac”)

The Offset Regulations (reg 2.03A)

In previous EMA Notes we have discussed the evolving law around casual employees being potentially entitled to NES entitlements including paid annual leave. The new Offset Regulation provides that if:

  1. a person is employed on the basis that they are a casual employee; and
  2. the employer pays the person a loading amount that is clearly identifiable as an amount paid to compensate the person for not having one or more relevant NES entitlements; and
  3. the employee is found to have been an employee other than a casual employee for the purposes of the National Employment Standards; and
  4. the employee makes a claim to be paid for one or more of the relevant NES entitlements,

the employer may make a claim to have the loading amount taken into account in determining any amount payable to the person in lieu of the relevant NES entitlements.

The regulation “does not affect the matters to which a court may otherwise have regard, at law or in equity, in determining an employer’s claim to have the loading amount taken into account.” It is only a potential counter-claim relevant to the compensation to be awarded. For example, the fact that a casual loading was paid will not prevent the court from examining the other aspects of casual employment discussed in Workpac.

Although the employer may make a claim for offset; the claim might or might not be accepted by the Court.

All of the requirements must be met in order for any casual loading to be taken in account by the court. In particular, Offset Regulation (1)(b) requires that the employee must be paid a clearly identifiable amount to compensate the employee for NES entitlements. The most obvious place is the contract of employment. If the contract of employment does not identify such amount, and that it is to offset identified NES entitlements, it will be more difficult for the employer to demonstrate that requirement has been met and they could be prevented from seeking an offset.

Note 1 of section 2.03A(1) limits the scope of the regulation to situations where the employee was “mistakenly classified as a casual employee”. The interpretation of what constitutes such a “mistake” will have to be determined by the Court in a particular case.

The Offset Regulations do not mean that employers will be immune to pecuniary penalties. This has yet to be tested.

Employers should check their current templates for letters of offer and employment contracts for future casual employees to ensure that they contain appropriate wording to at least meet this requirement and that they comply with any awards or enterprise agreements.

Award clauses on a casual employee’s right to convert

If you have employees to whom a modern award applies, you are likely to have been required to provide all existing casual employees (who were employed as at 1 October 2018) with a copy of the new award clause specifying their right to request conversion to permanent employment in some circumstances. The compliance date for this was 1 January 2019. If you are unsure, contact EMA Consulting for specific information about your awards.

Require further information/assistance?

If you require further information or advice, please contact one of our Consultants.


1 Fair Work Amendment (Casual Loading Offset) Regulations 2018
2 [2018] FCCA 3628 (7 December 2018).

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