08 Jan A NEW FAIR WORK REGULATION RELATING TO CASUAL EMPLOYEES IS NOW IN EFFECT
Whether an employee is casual or permanent has significant implications for an employee’s entitlement to annual leave and other paid leave benefits. But employers must note that the description of an employee as a “casual” may not necessarily mean that the employee is in fact a casual as we understand it and may result in the employee having a claim to certain permanent entitlements under the National Employment Standards (“NES”).
WORKPAC PTY LTD V SKENE
In the recent decision of WorkPac Pty Ltd v Skene  FCAFC 131, it was held that an employee who had been categorised as a “casual”, was not in fact a true casual employee due in part to his regular pattern of hours and expectation of continuing work. As a result, the employee was entitled to paid annual leave associated with such employment, in addition to the casual rate of pay he received during his employment.
This decision opened up the prospect that casual employees who are miscategorised, may have a valid claim to entitlements associated with permanency (such as annual leave) and may be able to “double dip” in these circumstances (e.g. receive the casual loading but still be entitled to entitlements the loading is intended to compensate).
THE NEW REGULATION
As a result of discussion surrounding the above decision and concerns about the impact “double dipping” would have on employers, the Fair Work Act Regulations 2009 (Cth) have been amended to protect employers from casual employees “double dipping”.
The new regulation known as the Fair Work Amendment (Casual Loading Offset) Regulations 2018, allows for an employer to claim that an employee’s casual loading payments should be offset against any subsequent claim for NES leave entitlements in circumstances where the following requirements are satisfied:
- The employee is employed by the employer on a casual basis;
- The employee is paid a casual loading which is clearly identifiable as an amount paid to compensate the employee in lieu of entitlements that casual employees are not entitled to under the NES (e.g. paid annual and personal leave);
- The employee was in fact a full-time or part-time employee for part or all of their employment for the purposes of the NES (despite being classified as a casual employee); and
- The employee has made a claim to be paid for NES entitlements (which casual employees do not have) that they did not receive for all or part of the time they were wrongly classified as a casual employee.
The changes came into effect on 18 December 2018 and apply to employment periods that occurred before, or that occurred on or after, 18 December 2018.
WHAT EMPLOYERS NEED TO DO
If you have employees who you have categorised as casual employees, we recommend looking at their employment patterns, payslips and contracts of employment. Casual employees who do not have irregularity, uncertainty, unpredictability, intermittency or discontinuity in the pattern of their work, may be able to claim to be paid NES leave entitlements. Further, payslips and contracts of employment should clearly identify that a casual loading is paid to a casual employee, in lieu of NES entitlements. In the case that they do make such a claim, you must ensure that you have complied with all four requirements of the new regulation set out above to be able to benefit from the changes.
If you need assistance reviewing your contracts of employment, working out whether any of your casual employees may have a claim for permanent entitlements or you require guidance when classifying new employees to avoid the risk of such a claim being made, contact the team at HR Law for advice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.