Casual workers who have worked regular and systematic hours are now entitled a permanent employee’s entitlements, according to a Federal Court of Australia judgment.
The court confirmed that “predictable periods of working time” constituted a permanent employment and are therefore owed permanent entitlements.
The court case involved a retired Glencore Australia worker who had spent his time at the Collinsville and Newlands coal mines in Queensland and New South Wales, respectively from 2014 to 2018.
Australian Resources and Energy Group AMMA stated that the court’s “remarkable” position was highly damaging to business confidence and would see more internationally-funded class action law firms.
“Most would agree it is rather unfair that an employee could accept a higher rate of pay for being casually engaged, only to later also claim for back-paid permanent entitlements such as annual leave and redundancy, due to their patterns of work,” AMMA chief executive Steve Knott said.
“Many Australian businesses – small, medium and large – are hanging on by their fingernails in this COVID-19 environment. The prospect of having to defend up to six years’ worth of back pay claims from former casual employees is the last thing they need.”
AMMA also intends to urge the federal government to amend the Fair Work Act to define a casual employee as one that has been “engaged and paid as such”.
The industry body also suggested an automatic right for casual employees who work on a regular and systematic basis to convert to permanency after 12 months with the same employer.
“Casual employment and labour hire is a small but very important function of Australia’s labour market,” Knott said.
“In the resources industry, where it comprises about 16 per cent of the total workforce, casual employment often provides a foot-in-the-door in entry level positions for people new to the industry.
“At the other end of the spectrum, highly-skilled employees often take well-paid casual contracts where their capabilities are in greatest demand.
“Until the Australian Parliament fixes this issue with a clear, common-sense definition of casual employment, businesses will remain reluctant to hire casuals or provide existing casual employees with any regularity in their working hours.”
Business New South Wales, a peak policy and advocacy body that represents businesses in the state, made the same, urgent call for a federal government action.
“These court decisions are sending shock waves through the business community who have acted in good faith and on the understanding that they were paying casual staff higher hourly rates in compensation for leave entitlements,” Business New South Wales chief executive Stephen Cartwright said.
“That has of course all now been thrown out the window yet again in another court decision that has allowed casual employees to double dip.
“This has the potential to cost employers across the nation billions of dollars, which would be a devastating blow in this economic environment and an inhibitor to employers re-engaging their regular casual staff as we emerge from the lockdown.”
Business New South Wales had proposed a new employment category – perma-flex – to signify flexible, ongoing employment.
Under this classification, a regularly rostered casual can convert into a permanent employee and receive flexible hours and paid leave entitlements, but this was opposed by the unions.