Casual Workers Double Dipping
If you employ casual workers, you need to read this! Updated information as at 20 May 2020 about casual workers double dipping leave entitlements
If you employ casual staff and want to avoid casual workers double dipping and getting twice for the same leave twice you need to read on.
The Story till May 2020
The Federal Court, in the case, WorkPac Pty Limited v Skene [2018] FCAFC 131, determined that that due to this particular employees working arrangements, the employee was a permanent employee, despite the fact that they were employed under a casual employment agreement.
As a result, the employee was entitled to any unpaid annual leave.
Now, the employer argued that they had already paid the employee their annual leave by virtue of the casual loading included in the employees base hourly rate of pay.
But the annual leave loading was not specifically detailed in either the employment contract, nor the payslips provided to the employee. And as a result, the employer was unable to prove that they had in paid annual leave and ended up having to pay it twice. Hence the phrase casual worker double dipping.
The Government reacted to this an enacted the Fair Work Amendment (Casual Loading Offset) Regulations 2018 in December 2018. Which were then incorporated into the Regulation 2.03A of the Fair Work Regulations 2009.
On the surface, these regulations are designed to enable employers to offset the casual loading paid to casual employees against entitlements they would be owed if the employee is later found to be a permanent employee during the course of their employment.
In theory, removing the potential double dip of casual workers getting paid there leave entitlements twice.
What happened in May 2020
The Federal Court handed down its findings in the case WorkPac Pty Ltd v Rossato [2020] FCAFC 84. Once again, the Federal Court determined that this particular person employed under a casual employment agreement was in fact a permanent employee.
It went further to state that the employer could not offset the 25% casual leave loading paid to the employee against any unpaid leave entitlements. As such the employer was now liable to pay the employee for any leave entitlements on top of the 25% casual leave loading.
So, it appears in my non-lawyer opinion that Regulation 2.03A of the Fair Work Regulations 2009 does nothing and if you employ casual employees you may still be liable to double pay a casual employee their leave entitlements.
What now?
The risk remains, if you have a person employed under a casual contract whom is actually determined to be a permanent employee you are at a risk of paying double for leave entitlements.
For all casual staff, make sure your employment agreements specify the casual loading paid and why the loading is paid (i.e. in lieu of annual leave, personal leave, notice of termination and other entitlements for full time and part time employees).
The next step is to then review all of your casual employees and determine if they could be classified as permanent employees.
Principles from the Federal Court state that a casual employee is an employee who has no firm advance commitment from her or his employer to continuing and indefinite work according to an agreed pattern of work. And this absence of a firm advance commitment is evidenced by irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability.
If you have any employees signed under a casual employment agreement whose work is regular and systematic, they could be deemed to be permanent employees and you are at risk of casual workers double dipping leave entitlements and it may be time to speak to a specialist employment lawyer about these staff.
If you are a member of a local business chamber speak to them as they have access to resources to help you here
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