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Casuals qualify for annual leave, says Federal Court

Casual staff who are paid a 25 per cent loading could now also be entitled to receive annual leave and other benefits associated with full-time staff, and may even be entitled to backpay, according to a recent Federal Court ruling.

The ruling is based on a specific example – a miner working regular hours for a labour hire firm, but on casual rates. The court’s decision effectively narrows the definition of a casual worker so that any employees with regular rostered shifts – so for instance Thursday nights and Saturday morning – will no longer be a casual in the eyes of the Fair Work Commission, regardless of their employment contract.

The miner’s work pattern was found to be ‘stable, regular, and predictable,’ so the court ruled he should receive the same entitlements as full-time employees. Employment status should be defined by an employee’s pattern of work, rather than their employment contract, according to the full bench of the Federal Court.

Following the ruling, it appears that any casual paid the 25 per cent loading for their casual status can now apply for annual leave, carers leave, and compassionate leave paid on top of their loading, for the past six years. The court also ruled that the 25 percent loading couldn’t be offset against the new entitlements.

It’s set the scene for class action law firms and their international litigation funders to move in and make windfall profits at the expense of employers. The AFR estimates that the bill to pay casuals for past entitlements could be around $8 billion. Small business might avoid the carnage as litigation funders look for more lucrative, easy targets – big corporations like BHP which have been paying employees as casuals, even though they have been working for years on full-time hours. Labour hire firms will almost certainly be targetted in litigation.

Australian Industry Group Chief Executive Innes Willox said the law now needed to be changed.

‘An employee engaged as a casual and paid a casual loading should not be allowed to turn around years later and claim the entitlements of a permanent employee, like annual leave,’ he said.

Industrial relations minister Christian Porter is considering amending the Fair Work Act, while the ruling is likely to go to appeal.

“And I think that, yes, we will need to work out how we define casual in the Fair Work Act because clearly that uncertainty is itself causing economic problems and inhibiting the growth in jobs,’’ he told

In an article in print industry website, Print 21, the Australian Sign & Graphics Association (ASGA) provides some guidance to employers who employ casuals:
– Employers should ensure that it is clearly documented in an employee’s employment contract that they are employed as a casual;
– Make sure casual employees do not have predictable hours of work and rosters laid out weeks in advance;
– Casuals should be paid 25 per cent more than your permanent employees with that specified on their payslip;
– Be prepared to accept that casual employees can, from time to time, reject shifts that are offered

ASGA said it would be also worthwhile considering transferring casual employees who work regular hours to part-time permanent status, which could lead to a lower wage bill, especially given the Federal Court ruling.

Read the full ruling here.








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