How will the Changing nature of Australia’s Workforce affect you?

Recent studies have shown that the Australian workforce is increasingly moving towards casual employment arrangements. Traditionally, employees have benefited from receiving a loaded wage (which is in place to compensate paid annual leave and other permanent employment benefits) and flexible working hours, while employers have benefited from being able to roster staff on an “as needed” basis.

However, a decision handed down by the Federal Court, WorkPac Pty Ltd –v- Skene [2018] 1, FCAFC13 has raised concerns amongst all employers of long-term casuals.

In that decision, an employee was able to successfully claim that they had been miscategorised as a casual, rather than a permanent employee by their employer.
As a result, on termination, the employee was able to claim from the employer long-term entitlements such as annual leave and other accrued permanent benefits.

The decision has raised the prospect of unfair “double-dipping” in favour of the employee. Double dipping is employees receiving the loaded casual wage while employed, then claiming permanent employee benefits at the end of their employment.

Under the Fair Work Act 2009 (Cth), permanent employment benefits and casual employment benefits are meant to be mutually exclusive entitlements and this has raised serious concerns for employers, making them understandably reluctant to employee long-term casuals.

In response to these concerns, the Federal Government has introduced amendments to the Fair Work Regulations 2009 (Cth) to include a regulation specifically dealing with this situation.
The new Regulation allows an employer to offset the value of casual-loading payments (retained by the employee) when calculating permanent benefits owed to the employee over the relevant period (if such a claim is made). This is intended to prevent “double-dipping” by employees at the end of their employment.

However, the Regulation does not remove the risk that a long-term casual employee may later claim permanent entitlements on the basis that they were miscategorised as a casual in the first place.

As a result, disputes of this nature are likely to increase and the decision has created a degree of uncertainty for employers of long-term casuals.

So what should employers to avoid this situation? It is recommended that employers seek professional legal advice when reviewing their current employment arrangements to limit their exposure to such claims in the future.

If you require assistance in this regard, please give us a call.

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