Summary
Last year the much publicised decision of the Full Federal Court in WorkPac Pty Limited v Skene [2018] FCAFC 131 (Skene) caused widespread concern in business circles. In response the Government varied the Fair Work Regulations 2009 (Cth) (Regulations) permitting employers, in certain circumstances, to claim that an employee’s casual loading payments should be offset against certain entitlements owing to the employee.
The new regulation applies to employment periods that occurred before, or that occurred on or after, 18 December 2018.
Background
As you may recall in the Skene case, the Court found that Mr Skene was entitled to annual leave despite his employer considering and engaging him as a casual. The principal controversy as a result of the decision was the potential ‘double dipping’ by employees who receive the benefit of the casual loading—said to be in lieu of leave entitlements, redundancy and notice of termination—and then also receive the value of permanent employee entitlements.
The Government, in response to widespread stakeholder concerns, passed the Fair Work Amendment (Casual Loading Offset) Regulations 2018, amending the Regulations. The amendment enables employers who have incorrectly classified employees as casuals instead of permanent employees, to make a claim that the casual loading already paid should be offset against the value of any entitlement under the National Employment Standards (NES) that casual employees do not have.
The Regulation applies where all of the following criteria are met:
- The employee is employed by an employer on the basis that the employee is a casual employee;
- The employee is paid an amount (the loading amount) that is clearly identifiable as being an amount paid to compensate the employee in lieu of one or more relevant NES entitlements, such as personal or annual leave;
- During all or some of the employment period, the person was in fact an employee other than a casual employee (eg. full time or part time employee) for the purposes of the NES (despite being classified as a casual employee by the employer); and
- The employee makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements that they didn’t receive for all or some of the time that they were incorrectly classified as a casual.
The Regulations provide a useful note and some practical examples in relation to an identifiable casual loading amount paid in lieu of a relevant NES entitlement, which we will cover during our upcoming Breakfast Seminar on 14 February 2019.
While the Government’s change on this front is welcomed, it is not the only change employers need to be aware of for 2019. Click here to view the invitation, which sets out the details and other “Workplace Insights” and changes we will cover at our inaugural event for 2019. We hope you can join us!
Please contact the HWL Ebsworth Workplace Relations and Safety team on to discuss how your business engages casuals and any potential exposure to risk, or in relation to any other employment and workplace issue.
This article was written by Heinz Lepahe, Partner, Vanessa James-McPhee, Senior Associate and Radhia Aku, Law Graduate.
P: +61 7 3169 4854
E: hlepahe@hwle.com.au