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Federal Court decision will undermine business confidence by creating a new ‘super employee’ category

August 17, 2018

CEO of Australia’s peak industry body representing recruitment and staffing, Charles Cameron, expressed exasperation at today’s Federal Circuit Court decision of WorkPac Pty Ltd v Skene, saying it would be a ‘kick in the guts’ to business confidence at a time when Australia was enjoying job-creation confidence.

 

“This decision has shone a light on a significant anomaly that exists within the current Fair Work Act where an employee can double dip on leave entitlements and payments,” he said.

 

“The ability of the Act to be interpreted in this fashion creates enormous uncertainty for business in Australia and highlights the huge difficulty that exists for employers in complying with unclear law.” 

 

“Today’s decision has paved the way for casual employees to ‘double dip’ on their entitlements, enabling them to accept a casual loading in lieu of permanent employee benefits but then still legitimately claim a right to the very leave they accepted the loading in place of,” said Mr. Cameron.

 

 

“This essentially creates a new ‘super employee’ category that has not existed previously, nor do we believe it was ever the intent of the then ALP government law-makers to create.”

The WorkPac Pty Ltd v Skene decision has created a pathway for an employee to be deemed a permanent employee at the same time as being paid as a casual employee. 

Essentially, if a casual employee ends up having regular and predictable hours, this decision deems them entitled to annual leave from the commencement date of the casual employment relationship, calculated at the loaded pay rate.  Moreover, that entitlement exists for employment up to 6 years prior to the date of the decision. 

 

Today’s decision has enormous implications for employers of casual staff across Australia.  It creates substantial unanticipated liabilities for businesses both large and small, including government, in relation to employee entitlements which they had no reason to previously believe existed.

 

“This will be a pivotal test case for causal employment in Australia.   While the liability implications are huge, perhaps the most concerning aspect of the decision is its potential to impact the employment environment in this country,” said Mr. Cameron.  

 

“Employers work hard to comply with employment law but they have a right to expect that the law that governs them is clear about their obligations.  Decisions like that handed down today essentially ‘rip the rug out’ from under the feet of business trying to do the right thing and create enormous uncertainty for everyone. “

 

 “If this interpretation of the Act is upheld, it will turn employers away from creating employment pathways for Australians through casual work,” said Mr. Cameron.