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The Federal Circuit Court has handed down its decision on the penalty to Workpac for failing to give its employee—Mr Paul Skene—annual leave, because he was engaged as a ‘casual employee’.

We have outlined the details of this case in a previous EMA note. In summary, an employee engaged as a ‘casual’ employee was entitled to annual leave, because his hours of work and rostering patterns were indicative of permanent employment rather than casual employment. The matter was remitted to the Federal Circuit Court for a decision on calculation of the value of the leave and on the appropriate penalty, which has now been handed down in Skene v Workpac Pty Ltd (“Skene v Workpac”).1

Outcome – Penalty and Compensation

In the primary decision on compensation, handed down by Justice Jarrett, Mr Skene was awarded compensation calculated as five weeks annual leave per year for 1.75 years, totalling $21,054.69 plus interest.2 This was based on the five-week annual leave entitlement under the National Employment Standards for a ‘shiftworker’.

In this most recent decision, the Federal Circuit Court ordered an additional 1.75 weeks of annual leave be paid to Mr Skene, being the outstanding amount owed under the applicable enterprise agreement for his work. Workpac was penalised $1650, being 5% of the maximum penalty for breaching the National Employment Standards. The reduction in this penalty was due to the unclarity of the operation of the law prior to this case. Finally, costs were ordered in favour of Mr Skene.

Offsetting and Double Dipping

Justice Egan did not address the principles of offsetting or “double dipping” of casual loading in his decision. As a result, Industrial Relations Minister Kelly O’Dwyer is proposing a regulation be introduced to prevent employees being entitled to leave entitlements where they have already been paid a casual loading intended to offset that entitlement.3

Where to go from here?

The penalty decision in Skene v Workpac has provided no additional guidance in relation to what employers should do in relation to their casual loadings.

Notwithstanding the lack of guidance by the Court in relation to offsetting against the casual loading, and as a result our inability to provide further clarity on this, we recommend employers should at least continue to ensure that their letters of offer, contracts of employment, and enterprise agreements identify a casual loading, identify how much that loading is, and explicitly state what foregone entitlements the casual loading is intended to offset. If employers require further information about this, or require assistance in drafting as recommended above, please contact one of our Consultants.

Employers should also remain prepared for potential claims by employees and unions for accrued leave for casual employees.

Require further information/assistance?

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

1 [2018] FCCA 3628 (7 December 2018).
Skene v Workpac Pty Ltd (No 2) [2017] FCCA 525 (20 March 2017).
3 Dana McCauley, ‘Kelly ODwyer Unveils Bold Solution to Casual Worker “Double Dipping”’, Sydney Morning Herald, 10 December 2018.

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