Are your casual employees entitled to paid leave?

In welcome news or private medical practices and other employers across Australia, on 26 November 2020 the High Court of Australia granted Workpac special leave to appeal the decision of the Full Court of the Federal Court in Workpac v Rossato.

Current state of play

The Full Court decisions of Workpac v Skene and Workpac v Rossato have caused widespread confusion and uncertainty for employers. In these cases, employees who were engaged as casuals and paid a casual loading were found not to be casual employees and were successful in their claims for permanent entitlements.

Employer concerns

Many of our members have been concerned about the potential for “double dipping”, where they pay the employee a casual loading and may later be ordered to pay the employee permanent entitlements e.g. paid annual leave, paid personal/carer’s leave, paid compassionate leave and payment for public holidays.

Employers, industry and Government have also been alarmed about the potential cost impact to business, particularly small businesses that are already struggling to deal with the financial challenges caused by the COVID-19 pandemic.

Watch this space

The High Court decision may not be delivered until late 2021, but it will provide some much-needed clarity on the interpretation of the common law around casual employment. Until then, the decision in Workpac v Rossato represents the current position on casual employment, subject to current legislation and any legislative reform.  

Meaning of casual employment

For the time being we should look to the Full Court for guidance on the meaning of casual employment. It has established that the essence of casualness is the “absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work”. Other key indicia of casual employment include irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability.

To provide certainty about obligations and rights, the Government has proposed that the Fair Work Act 2009 (Cth) be amended to introduce a statutory definition of “casual employee” which incorporates the key common law principle that a casual is someone who has no firm advance commitment to ongoing work.  

What does this mean?

The issue of long term casual employment is not a new one for private practice. Until the Fair Work Act is amended and the High Court provides clarity on the issue, there are several things you can do to minimise the risk of an underpayment claim against you or your practice:

• Correctly identify whether an employee is a casual or permanent and issue the correct type of employment contract

• Separately identify any casual loading

• Review the days and hours of work of your casual employees

• Consider whether to convert casuals to permanent employment noting the casual conversion clause in Modern Awards.

This article is current as at 15 Dec 2020.