Federal court rules casual workers entitled to annual and personal leave

Handed down on Wednesday, the ruling states regular shift workers are now entitled to paid leave, paid personal/carer's leave, and paid compassionate leave. 

It's estimated the decision will cost employers up to $8 billion in backpay and affects some 1.6 million casual workers.

Previously, casual employees were paid 20-25% loading instead of leave entitlements, but the court ruled an employees' pattern of work defined them as a casual. 

For example, an employee who worked 30 hours over two years, at the same time on the same days would not be considered a casual employee: Shifts must be irregular and intermittent. 

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The ruling has been hailed as a massive win by some, but others see it as the final nail in the coffin for small business, given the COVID-19 induced economic downturn. 

Industrial Relations Minister Christian Porter came out in support of employers and said the government would consider intervening to protect businesses. 

"What appears fairly obvious on the face of the decision is that it has immediate practical implications for the bottom line of many Australian businesses at a time when so many have taken a huge hit from the COVID-19 pandemic," Mr Porter said.

"There is of course potential for an appeal in the matter and if that were to occur, the government would closely consider the merits of intervening.

"Given the potential for this decision to further weaken the economy at a time when so many Australians have lost their jobs, it may also be necessary to consider legislative options."

In a sign the political bipartisanship the pandemic has brought about may be coming to an end, Opposition industrial relations spokesperson Tony Burke said his party would strongly oppose any legislative changes. 

"And if the Government thinks after all the insecurity that people are living in Australia at the moment, that he wants to change the law to give people less job security — we're there for that fight," Mr Burke said. 

A landmark court ruling has confirmed more than 1M casual workers have a right to the same entitlements as full time staff. Unions say it as a win for workers’ rights. Industry groups say they'll fight the decision which could cost employers 'billions of dollars'. @bryanseymour1 pic.twitter.com/RuAG4omFLS

— 7NEWS Sydney (@7NewsSydney) May 21, 2020

'Double-dipping' 

Australian Industry Group Chief Executive Innes Wilox said the casual employees were reimbursed in lieu of not getting entitlements, and the decision would hurt business and employees alike. 

"An employee engaged as a casual and paid a casual loading should not be allowed to turn around years later and claim the entitlements of a permanent employee, like annual leave,” Mr Wilox said.

"With unemployment and underemployment rapidly increasing during the COVID-19 crisis, employers need to be encouraged to retain and take on casual employees – not deterred from doing so."

Tony Maher, National President for The Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) said casuals were previously being rorted by businesses trying to limit their overheads. 

“This is a fantastic decision that puts an end to the ‘permanent casual’ rort that has become a scourge in the coal mining industry and across the workforce,” Mr Maher said. 

"What they do is the lazy thing of saying we'll convert our workforce to 30, 40, 50% labour hire, we'll call them casual and we'll pay them 40% less than everybody else.

"[The judgment] means a lot of people will be freed of this evil business model."

What happened in the case? 

Robert Rossato worked as a mine worker for labour hire firm WorkPac at two Queensland mines owned by Glencore.

Mr Rossato was a casual employee on rolling contracts over a three-and-a-half year period, and was paid an extra 25% on top of his wage, as was the practice for casual employees. 

The Federal Court ruled because Mr Rossato's employment was "regular, certain, continuing, constant and predictable", and he was given his rostered shifts well in advance, he was eligible to the same entitlements as a full time employee.

WorkPac argued Mr Rossato would be "double-dipping" by receiving entitlements and his 25% casual loading. 

But the Court disagreed and knocked back WorkPacs claim that if Mr Rossato was considered a casual, he should have to forfeit his casual loading.