The federal court recently ordered an Australian business to pay retrospective leave loading to a casual worker. And the decision has caused concern about casual workers across a range of industries.
The decision may have related to an individual case with a specific set of circumstances. But it has also created uncertainty around the valid employment of casuals under Australian Industrial Awards and Enterprise Bargaining Agreements.
It could have ramifications for any businesses – including those in retail – that employ casual workers.
15 years’ of annual leave
Earlier this year, the federal court ordered a small construction business in SA to pay a former casual worker 15 years’ worth of annual leave. The court said the casual worker should have accrued the leave entitlements of a permanent employee.
CEO of Australasian Convenience and Petroleum Marketers Association (ACAPMA) Mark McKenzie said, “Analysis of the decision by the Australian Industry Group suggests that the decision could potentially have implications for the employment of around 1.6 million of the 2.6 million casual employees in the Australian workforce. And it could result in employers being required to pay anywhere between $5.7 billion and $8 billion in retrospective costs.
“But before we scare the horses too much, it is worth noting that several aspects are peculiar to this specific case.”
These peculiar aspects include the fact that the worker:
- worked regular full-time hours for a period of 15 years.
- had no indication of ‘casual’ employment status on their payslips.
- did not apparently receive 25 per cent loading under the relevant workplace agreements.
Crucially, the federal court determined that the worker was not conscious that they were casual. It also said the employer had provided no evidence that they had clearly advised the employee of their casual status.
Nor was there any evidence that the employer gave the worker the choice to transition to permanent work after more than six months of regular hours – as required in many Australian Industrial Awards.
‘Matter of urgency’
“Given that our industrial award already makes provision for a casual employee working regular hours to transition to a permanent employee, the recent federal court case is most significant if the business has not followed – with appropriate documentation – the procedures set out in Clause 13 of our Industry Award,” ACAPMA’s Mr McKenzie said.
“That said, the question remains over what constitutes ‘regular work hours’. This is an issue that we are pursuing with the federal government as a matter of some urgency.”