Do you employ casuals?  Does your business rely on you being able to employ casuals?

If your answer is YES, then you will be concerned by a recent landmark ruling by the full Federal Court of Australia which found a truck driver employed at a Rio Tinto mine as a casual, was not a casual under employment law.  The distinction being his regular and continuous pattern of work.

The full Federal Court of Australia on Thursday found a truck driver employed at a Rio Tinto mine under a labour-hire arrangement as a casual, was not a casual under employment law, because of his regular and continuous pattern of work.  The court found that the truck driver, on termination of his employment,  was in fact entitled to be paid annual leave accrued during the two and a half years he worked as a casual.

This interpretation of the Fair Work Act is not necessarily limited to casuals working through a labour-hire arrangement, but has implications for all employers engaging casuals on a long-term basis.

We all know that casual employees are paid a ‘loading’ to compensate for the fact that under the Fair Work Act national employment standards (NES), casual employees are not entitled to accrued annual leave as permanent employees are.  But clarification is needed to provide that an employee engaged as a casual and paid as a casual is a casual for the purposes of the Act.

Innes Willox, Chief Executive of Australian Industry Group (AIG), Michele O’Neil President, Australian Council of Trade Unions (ACTU) and Tony Maher, National President, Construction Forestry Maritime Mining Energy Union (CFMEU) have all weighed in on this ruling.  Plus, a spokesman for Craig Laundy, Workplace Minister says the minister is “Reviewing the decision carefully, including any broader implications”.

Well, prior to any ministerial review being done, I’ll give the Minister the heads up…. this decision has the potential to cause chaos within the small business community many of whom rely on casuals to help run their businesses and it will open the door for many casual employees to make claims for unpaid leave entitlements.

From my years in both recruitment/labour-hire and in my dealings with the SME community, it has been safe to assume that if you hired someone as a casual they were not entitled to annual leave.  This ruling suggests the uncertainty of that assumption and the likelihood of major liability implications down the track for unsuspecting employers.

This is a double whammy for employers having to pay up to 25% loading to casuals only to have them claim unpaid leave entitlements when they leave their employment.   What of the effect on jobs, particularly for young people?  Are we deliberately trying to grow our unemployment numbers?  This must get sorted by issuing a standard definition of casual employment that is workable and not able to be over-ruled in any court.  Business owners must have certainty on this issue.

If you have any concerns that this might impact you or your business, I suggest you get some advice on this issue.  Alternatively, feel free to give me a call. I am happy to discuss your particular circumstances and help to give you some clarity.

Author : Angie Mardon, Engine Room Hub