Australian Resources and Energy Group AREEA notes today’s Full Federal Court decision in WorkPac v Rossato has done nothing to restore common sense to casual employment arrangements and fend-off damaging US-style class action law suits.

The matter is one of two significant cases – the other being WorkPac v Skene – which have tested the Fair Work Act’s treatment of casual employment arrangements.  In both cases, the Federal Court has ruled an employee’s patterns of work were the key determinative factor to their employment status.

“The position taken by the Federal Court in multiple decisions now, is that an employee can sign a casual employment contract and be paid a casual loading, but later claim to be owed permanent entitlements,” Steve Knott, AREEA chief executive said.

“This is a remarkable position that is highly damaging to business confidence and will see more internationally-funded class action law firms, many with obscenely large contingency fees, circling Australian businesses like sharks.

“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.

“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.

“The capacity to deal with something this unforeseen will send many of them to the wall.”

Mr Knott said AREEA will urge the Morrison Government to amend the Fair Work Act to clearly define a casual employee as one that has been “engaged and paid as such”.

An important balance to this, he said, was to provide an automatic right for all casual employees working 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,” Mr 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.

“Demonising casual employment arrangements is short-sighted and far removed from reality.

“Business needs all the options it can get, and as much confidence as can be mustered, to get people back into employment as quickly as possible during the post-pandemic economic recovery period.”

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