CASUAL EMPLOYEES - DO THEY GET ANNUAL LEAVE AS WELL AS THE CASUAL LOADING - AN IMPORTANT UPDATE

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As we recently advised, following the WorkPac Pty Ltd v Skene [2018] FCAFC 131, the issue about whether employees that are employed on a casual basis has been a very hot topic. With potential liabilities for some companies in the hundreds of thousands and in some cases millions, the issue about whether the casual loading paid to casual employees can be offset against the annual leave has be a very live issue.

With a Federal election not far off and the expiry of time to appeal to the High Court, there were real concerns that this issue might be around for a while before being clarified or hopefully corrected.  Whilst that still might be the case, Workpac in another matter have lodged an application in the Federal Court seeking a Declaration that an employee who was employed on a casual basis does not have an entitlement to annual leave or in the alternative, if it is found that they do qualify for annual leave, the casual loading paid to the employee can be offset against that obligation.  This Application has received strong support from the Federal government who are seeking to intervene in the case.



In a statement released on 18 October 2018, the Minister stated,

“The Government is very concerned that the legal right to offset an obligation against payments already made for the same entitlements was not dealt with in Skene v WorkPac. We want to make sure the same thing does not happen again. It is important for me to intervene in this case given the considerable concern across Australia’s three million small businesses and given the impact it could have on job creation and existing jobs”.

This is an important case with the usual suspects of Unions and employer associations coming out strongly in support of their position.

This is a critically important case.  We will be watching it carefully as it proceeds and will keep clients informed as it proceeds.  In the intervening period, clients will need to consider what risk mitigation strategies they want to implement and we are available to discuss that with clients.

The matter is due back in Court on 8 November 2018 for a case management hearing.  How quickly we get an answer is not yet clear, but it seems that it will probably be faster than the alternatives of legislating change or waiting for someone to put it up before the High Court.