If you currently employ casual staff or are looking at doing so, this week’s landmark ruling from the Federal Court is big news you’ll need to know about.
Australian Workforce Management company, Workpac, has been ordered to back-pay casual employee Robert Rossato unpaid annual leave, personal leave, compassionate leave and public holiday payments, despite the fact that his employment contract stipulates him as a casual, and as such he had already received 25% leave loading on his pay.
How did the court come to this decision?
The ruling hinges on the fact that even though Mr Rossato’s contracts outlined his role as casual, the nature of his employment—a long-term roster with set hours and “predictable periods of working time”—which better fits the description of a permanent employee.
In other words, it’s not what you call a thing, but what it actually IS that matters. The courts upheld the definition that casual employment is indicated by irregular and intermittent work patterns, unpredictability, and uncertainty. If an employee has set working hours and an ongoing roster this is hardly the case.
How does this affect me?
In effect, Workpac will be paying Mr Rossato’s leave entitlements twice, as they have already paid the 25% leave loading applicable to casuals, and will now be required to pay those leave entitlements again. And, although this decision will now be taken to the Supreme Court, it opens the way for casual employees across the country to seek similar entitlements.
This decision can have huge ramifications for small businesses, many of whom choose to employ casuals rather than permanent staff, and many of whom will potentially be put out of business by any class action case for back-pay such as this one.
It’s important to know your rights and responsibilities as an employer. If you employ casual staff, our team of workplace experts would be happy discuss what measures you can put in place to limit exposure to the types of backpay claims that can arise from these latest rulings. For assistance simply call us on 1800 577 515, or book a video conference call.