The Australian Sign & Graphics Association (ASGA) has issued a bulletin to members titled 'The Casual vs Part-Time Employee Distinction ... Chaos Reigns!' that provides “important information for those companies which use casual employees” following the Federal Court ruling that ongoing casual workers are entitled to paid sick leave and annual leave.
Employer association Ai Group said the court decision could cost Australian employers up to $8 billion for annual leave alone and has called for urgent legislative reform "to restore fairness.”
In his bulletin, ASGA business adviser Warwick Ryan agrees that the decision potentially exposes employers, “including ASGA members across the country, to significant retrospective bills for unpaid leave, especially annual leave.”
Warwick Ryan of Hicksons Lawyers,
The Casual vs Part-Time Employee Distinction ... Chaos Reigns!
The Full Federal Court has confirmed chaos in the employment space in its decision, WorkPac Pty Ltd v Rossato  FCAFC 84 (‘Rossato’) this month. The impact of its finding is that many, if not most, casuals employed by businesses will now be categorised as permanent part-timers and their employers are therefore liable to provide them with certain entitlements.
This is not the first time that the full Federal Court has adopted such a position.
In 2018, the same court, in the similar matter of WorkPac v Skene  FCAFC 131 (‘Skene’), reached the same conclusion. At the time, it was a fundamental break from the approach of the Fair Work Commission which, to that point, understood that the payment of the 25% casual loading more than compensated for the entitlements (being annual and sick (personal) leave) that casuals did not accrue.
Its impact is to potentially expose employers, including ASGA members, across the country, to significant retrospective bills for unpaid leave, especially annual leave.
The earlier Skene case was about an employee engaged under an Award. The recent Rossato decision dealt with the nature of casual employment under the Fair Work Act which means that it has a broader impact for casual employment across all Awards, including those relevant to ASGA members.
What is most concerning about both decisions is that, even though the employer paid a premium to the casual employees (that is 25% loading) the Court determined that the employer had no right to offset. So, the ‘casual employees’ in these cases are able to ‘double- dip’.
The cause of this problem is that the Fair Work Act does not define ‘casual employment’, which leaves it open for Courts to determine what is and is not meant by casual employment.
Understandably, for many employers the decision is deeply concerning for ASGA members, who use casual employees.
So, if you want to avoid the problems that have arisen from this case make sure that:
1. It is clearly documented in an employee’s employment contract that they are employed as a casual;
2. The casual employees you have do not have predictable hours of work;
3. You do not provide rosters laid out weeks in advance;
4. You pay your casual employees 25% more than your permanent employees and that is specified on their payslip; and
5. Casual employees can and do, from time to time, reject shifts that are offered.
One thing employers can do is consider transferring their casual employees who work regular hours to a part-time role. Ironically, this will lead to a lower wage bill over time.
When in doubt as to who is and who is not a casual - we can help you gain greater clarity in that determination.