What you need to know about casual loading after landmark ruling

casual loading

A May 20 landmark decision in the Federal Court found that casual staff with regular and systematic shifts may not be considered ‘casuals’ regardless of what their contracts state, and they could be eligible for paid leave, and not eligible for casual loading. Millions of casual workers who fall into that category could be in for a major payout.

The ruling has exposed hundreds of employers to potential backpay claims, as ‘casual workers’ in Australia number at over 2 million.

Unions celebrated the decision, with the ACTU’s Sally McManus saying it would end a “loophole” that has disadvantaged workers, and CFMEU’s Tony Maher describing the previous labelling of regular workers as ‘casual’ as “a rort”. 

The decision is looking to cause ripples in big business, but what does it mean for small business owners?

SmartCompany news editor Matthew Elmas spoke with ASBFEO Kate Carnell and Employsure’s Ed Mallett in a May 28 webinar. Here are their key tips for how to navigate the current landscape.  

Be upfront with your casuals

Both Mallett and Carnell suggest having a conversation with your casual staff and offering them transitions to a more permanent position, regardless of whether they seem likely to take it. 

“Have a conversation. Say, ‘Look, I acknowledge that you might fall in the category of people who might be affected by this. We’re going to pause and look at this’,” Mallett says.

“Let’s keep talking and avoid either rushing to your cheque book now, or burying your head in the sand. Let’s try to press the pause button for a moment until we’ve got more clarity.”

Employsure has launched its six-month Advice and Support Package, an at-cost service giving employers unlimited access to its 24/7 Employer Advice Line, legal protection and peace of mind. Find out more.

Offer transitions to casual staff and be very clear about roles

Carnell advises small business owners to offer regular casual staff a more permanent role given the ruling. Especially for employees that have worked for longer than 12 months and have regular hours. 

“The legislation sort of says that already, but the court cases make it more ‘in your face’.”

Carnell has recommended the government establish a permanent part-time flexible role, or ‘perma-flexi’. Such a category would be for casuals who want to be able to work regularly, but still have the flexibility to knock back shifts. 

In the meantime, Mallett suggests casual conversion is the solution people are leaning towards. He urges business owners to examine how their labour hire is structured.

He states the liability will “always go back to the employer, the person who should have been responsible for paying the wages.”

Be aware of JobKeeper implications

Many businesses have signed up to JobKeeper to ensure their regular staff can stay on the books during the pandemic. 

But Mallett reminds business owners that signing on to JobKeeper means “we’ve made this admission that these people are essentially entitled to leave, which in itself creates a liability”. 

Get ready for some big changes

Both Carnell and Mallett argue for a simplification of the awards system, especially for small businesses. These conversations are ongoing, and both say the pandemic is pushing us towards changes for greater productivity. 

Mallett believes it has slowed a development towards a fractured gig economy saying, “I think that we’ll see much more reliance and understanding on how important jobs are to our social fabric.”

“We’re going to have to get productive if we’re going to have real productivity in a crisis, if we’re planning to have the growth we need to deliver the employment we need,” Carnell says.

“Productivity is going to require some real changes, some simplifications, some getting rid of red tape. Making it simpler, and making it easier to deliver more.”

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Employsure

Australia has one of the most difficult workplace relations systems in the world. Employsure is here to help employers navigate the complexity. Employsure is the largest provider of employment relations and work health and safety services in Australia — servicing more than 24,000 clients nationally. More than 300 advisers and consultants provide independent advice to business owners on their workplace relations and health and safety obligations. Every day Employsure gives business owners the confidence that their workplaces are safe, fair and compliant.

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