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Casual Employees and Leave Entitlements

Court ruling that some casual employees are entitled to paid leave

On Wednesday the 20th of May, the Federal Court handed down a ruling in the case of WorkPac Pty Ltd v Rossato [2020] FCAFC 84

In this case Robert Rossato was engaged as mine worker. He was employed by WorkPac as a casual employee for a period of approximately 3.5 years across six different contracts. He received a 25% casual loading.

The Federal Court ruled that an employee who works regular and predictable shifts with an advanced commitment were not casuals, despite them being engaged on a casual employment contract and receiving a 25% casual loading.

As such, it was determined that Mr Rossato was entitled to paid annual leave and personal/carers leave under the Fair Work Act 2009.

In addition to the above, it was ruled that the 25% casual loading could not be offset against the leave entitlements as it did not demonstrate a close correlation

“WorkPac’s contention is premised on the weekly payments having been paid in part for the contractually agreed purpose of paying Mr Rossato a casual loading and thus providing him with a payment in lieu of annual leave, personal/carer’s leave and compassionate leave. For the reasons I later address, I hold serious reservations about accepting that that premise is demonstrated on an objective assessment of each of the contracts in question. However, irrespective of whether or not that premise is accepted, this ground fails because a close correlation between the contractually agreed purpose contended for by WorkPac and Mr Rossato’s entitlements to leave is not demonstrated.”

Implications for your organisation

The above ruling has significant implications for many businesses. Industry groups have started to lobby the government to clarify the definition of a casual employee. The above case highlights the potential for casual employees who work regular and predictable shifts having the right to claim leave entitlements.

What should you do to mitigate this risk?

We recommend that you review the hours worked by all of your casual employees. If you have any casual employees who have regular and predictable shifts, consider transitioning them to part time or full-time employment.

In addition to this, you should ensure you are implementing the casual to part time/full time provision outlined in the relevant modern award that applies to your employees. Each modern award contains a provision that states casual employees who have been engaged as a regular casual for at least 12 months working a pattern of hours on an ongoing basis without significant adjustment, have the right to request that their employment be converted to full time or part time employment.

Further questions? 

For more information on the topic, please contact us on 1300 887 458 and speak with one of our HR Consultants. If you are interested in learning more about our HR services, including HR Outsourcing, HR Consulting, HR Advisory Services, contact us at enquiries@liquidhr.com.au.