The Senate voted in Federal Parliament on Monday night (16 September) to defeat an ALP motion to disallow the Fair Work Amendment (Casual Loading Offset) Regulations 2018 (“Regulations”). The regulations are designed to assist employers in opposing claims made by casual employees for payment of annual and other leave entitlements under the National Employment Standards (“NES”).
The introduction of the Regulations last December was driven by a decision of the Full Federal Court on 16 August 2018 in WorkPac Pty Ltd v. Skene [2018] FCAFC 131. In that case, the Court found that a former casual employee of WorkPac was an employee entitled to annual leave payments under the NES. One of the reasons for the finding was the casual employee’s regular pattern of hours and expectation of continuing work.
As a result of this decision, the then Minister for Jobs and Industrial Relations Kelly O’Dwyer announced the introduction of the Regulations. The key concern following the Skene decision was the potential for “double-dipping” of entitlements.
“Double-dipping” could occur where an employee has been employed as a casual and paid casual loading (usually 25%) to compensate them for non-accrual and payment of leave entitlements. But, if the employee was then found to be “an employee other than a casual employee” under the NES, this allowed them to receive these leave entitlements for which they had already been compensated for by being paid a casual leave loading.
Where a claim is made by a casual employee for payment of NES leave entitlements, the Regulations allow the employer to apply to have the casual loading amount taken into account when determining the amount payable. This allows the employer to offset the casual loading previously paid against any leave entitlements found to be owing.
In recent months, class actions have already been issued by the Construction Forestry Maritime Mining And Energy Union and various plaintiff law firms against employers claiming large sums of money in unpaid annual leave entitlements for casual employees. These claims had the potential to have a major impact on the bottom line and, in some cases, the viability of many businesses, had the Regulations been disallowed. The Regulations now continue to operate.
Hunt & Hunt’s Employment Law team can assist you in ensuring any claims under the NES are accurately reviewed and calculated in the event it is found that the employee was an employee other than a casual employee. Contact David Thompson, Principal, for further advice.
