|In 2018, we reported in an EMA Note on the decision in Workpac Ltd vs Skene 1 . An employee who was paid as a casual employee under an enterprise agreement was nevertheless found to be entitled to paid annual leave under the Fair Work Act 2009 (Cth) (“FW Act”) National Employment Standards (NES). In addition to the paid annual leave on termination, the employer was fined for breaching the FW Act.|
On 22 May 2020, another Full Court ruled in the case of WorkPac Pty Ltd v Rossato that a different employee of that same employer was also not a casual for the purposes of the NES 2. In this latest case, the Court reinforced that even if an employee is categorised and paid as a casual employee under an enterprise agreement, contract or award, the exclusion for a “casual” employee to various forms of paid leave under the NES does not necessarily apply to that employee. There must be a separate examination of how the employee works in practice to determine whether in fact they are a casual employee.
The Court also ruled that Workpac could not use any of the casual loading paid to Rossato to offset the value of the leave under the NES. All three judges determined that no set-off was available as the entitlement to paid leave cannot be offset by a monetary payment. Simplified, the entitlement to take a period of paid leave could not be ‘bought out’ by a contract. This may have significant implications for employers who have employed casual employees who meet the tests for being a permanent employee rather than casual employment. In short, it means there is an ability for the employee to “double dip” for both the leave and the casual loading, and that the right may also have retrospective application.
The Regulation introduced by Parliament after Skene to prevent this double dipping was found in Rossato to be of no assistance, because Mr Rossato was not claiming for payment in lieu of any entitlements—he was making a claim for the entitlements themselves.
Will this be “fixed”?
IR Minister Christian Porter, and some commentators, have suggested that a change to the legislation may be required. However, there are no details of any proposal and there is already intense political and union resistance to that. A legislated “fix” seems remote at the time of writing.
What should you do?
Every employer should be on notice to take this matter very seriously and review the work patterns and employment documents of all casual employees. Claims for historical leave credits from casual employees are expected. The financial cost could be very significant.
EMA Consulting will be running a webinar on this topic soon and will publish the details as soon as possible.
Require further information/assistance? If you require further information or advice, please contact one of our consultants.
1  FCAFC 131
2  FCAFC 84.