Jobs and Industrial Relations Minister Kelly O’Dwyer will intervene in a test-case before the Federal Court about whether casual workers are entitled to annual leave and other entitlements on top of casual loading.
The Federal Court is due to hear an application by labour-hire firm Workpac on Thursday which seeks to have the full bench determine whether casual loadings can offset annual leave claims.
It comes after an earlier case last month where the Federal Court ruled one of Workpac’s longstanding casual workers was entitled to annual leave back payments, despite having been paid casual loading.
The ruling sent shockwaves through the private sector, as it may potentially entitle millions of casual workers to annual leave back payments, estimated at up to $8 billion.
There is a particular concern for small businesses, which employ a comparatively large amount of casual workers.
O’Dwyer has been considering introducing changes to the Fair Work Act to nullify concerns casuals can “double dip” on entitlements, but decided on Thursday to become party to Workpac’s new test-case.
“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,” O’Dwyer said in a statement on Thursday.
“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,” she said.
It is understood O’Dwyer is still considering whether to pursue changes to the Fair Work Act.
In its initial ruling on the Workpac v Skene case, the Federal Court said the employee was entitled to annual leave because he had worked regular hours over an extended period of time.
While Workpac decided not to appeal the decision on that case, it has launched a test-case over whether casual loading can offset claimed leave entitlements.
O’Dwyer said small businesses need “clarity and certainty” to operate and the law needs to be made clear.
“It must be made clear that the fundamental common law right to offset is available to small business employers if it faces claims to pay for the same entitlement twice,” she said.
“Clarity and certainty strengthen compliance, which I am sure both employers and employees would welcome.”
The Australian Retailers Association (ARA) welcomed O’Dwyer’s intervention on Thursday.
“It’s encouraging,” Nick Tindley of FCB workplace law, the ARA’s legal partner, tells SmartCompany.
Although Tindley explains that the test case doesn’t deal with the heart of the court’s initial decision, which related to the definition of casual work under the Fair Work Act.
“It would appear to me that the solution has to be a legislative one,” he says.