New Regulations to Offset the Amount Claimable by “Casual” Employees Following the WorkPac Decision
The precedent set by the WorkPac decision is that an employee labelled a casual worker may be entitled to annual leave under the Fair Work Act 2009 (Cth), if (among other things) the employment arrangements displayed a regular pattern of hours, continuous work and there was a firm advance commitment to such work. One significant implication commentators have identified is that relevant employees may be able to ‘double dip’, receiving a casual loading in addition to permanent employee benefits such as annual leave.
In response to this concern, the Federal Government introduced the Fair Work Amendment (Casual Loading Offset) Regulations 2018 (New Regulations). The New Regulations prescribes that, in the event that a claim is brought by an employee for access to National Employment Standards (NES) entitlements, when establishing whether such NES entitlements are owed to the employee, the employer may make a claim for the casual loading payments to be taken into account.
Under s 2.03A of the New Regulations the following criteria applies as a prerequisite for employers’ offsetting claims:
- The relevant employer engaged the relevant employee as a “casual” employee;
- the relevant employee is paid a casual loading to compensate the employee for NES entitlements not provided to casuals;
- the relevant employee was misclassified as a casual for some or all of their employment period and their working patterns were more consistent with that of a full-time or part-time employee; and
- the relevant employee ‘makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements.’
The New Regulations became effective on 18 December 2018, however, they also apply retrospectively.
Workpac woes continue
In the wake of last year’s landmark decision, WorkPac are facing a class action law suit composed of over 600 mine workers. If successful, the claim could pave the way for over 25,000 coal miners to claim over $325 million in owed annual leave. The workers involved in the class action are on rosters that are regular and systematic and are claiming that they ought to have been accruing annual leave during their work period.
The lead applicant, Mathew Peterson, was engaged as a casual mobile plant operator in 2014 being paid a flat rate of $47 per hour. Mr Peterson claims to have worked a regular pattern of 12.5-hour day and night shifts up until his retirement in September 2017. The class action alleges that Mr Peterson accumulated 113 days of annual leave during his tenure and is owed $32,900.
Workpac contends that the workers were paid a higher hourly wage in lieu of annual leave and other entitlements, and that that the class action “is advocating ‘double dipping’ by demanding businesses pay for the same entitlements twice“.
We will soon find out just how effective the New Regulations will be in offsetting the amount claimable in the class action.
If you have any questions about the New Regulations or how the WorkPac decision affects you, or if you require advice on the important distinction between casual and permanent employment please do not hesitate to contact Nick Stevens, Jane Murray or Angharad Owens-Strauss.
