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Casual Worker Argues 'I was Permanent!' and Collects 15 years of Annual Leave

A federal court judge ordered an Australian company to pay out 15 years’ worth of annual leave to a former ‘casual’ worker.
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Casual Worker Argues

Casual Worker Argues 'I was Permanent!' and Collects 15 years of Annual Leave

26 March 2018

A federal court judge has ordered an Australian company to pay out 15 years’ worth of annual leave to a former “casual” worker after claiming that he in fact accrued the leave entitlements as a permanent worker during his tenure.

The former employee was dismissed by Mantina Earthmovers & Constructions in 2015, after 15 years of “casual” employment consisting of regular full-time hours. It was reported that there was no written employment contract and the worker was paid 20% casual loading during his time of employment, despite the 25% loading policy set under the relevant workplace agreement.

Given these circumstances, the federal judge made the decision on the worker’s entitlements based on the work agreements during the time of his employment.

Are your casuals really casual?

Accounting for one-in-five workers, casuals are hugely popular with employers who believe they offer greater flexibility in the workplace – simpler to hire, pay and dismiss. The reality can be in stark contrast.

Businesses have been facing the “perfect storm” in workplace relations in recent years. Today, employers need to remain hyper vigilant when employing casual workers, as powerful legislation and the union movement are increasingly protecting vulnerable workers hired under the casual classification. The new “super union” – formed through the merger of the Construction, Forestry, Mining and Energy Union and the Maritime Union of Australia will be closely looking at empowering workers, particularly regarding their wages and job security.

The law looks at the substance of the employment rather than the title of employment status.

According to Joe Murphy, Managing Director of National Workplace at Australian Business Lawyers & Advisors, the line between casual and permanent job classifications is drawn with complexity and risk.

“You simply can’t call the relationship ‘casual’ and expect that intention to prevail when a claim occurs”, Murphy says. “Choosing the right work arrangement at the outset, and documenting the conversion process is your best strategy for minimising the risk to your business.”

If a casual worker is employed for more than six-12 months on a regular and systematic basis, it is likely that the law will classify the worker as a permanent employee – without processing any paperwork. This shift of employment classification will begin at six months for businesses with more than 15 employees, and 12 months for smaller businesses with less than 15 employees.

While regular and systematic casuals are slipping quietly into the permanent status, it is important for employers to consistently look out for potential risks to avoid unforeseen penalties and back payments of up to $63,000.

Casual Workers Pitfalls and Penalties
*Up to $63,000 for a corporation, and up to $12,600 for a non-corporation.

“There are some important questions employers need to ask themselves when assessing potential risks,” Murphy adds.

  1. Are you hiring any casual employees for longer than 6-12 months?
  2. Do your casual employees work regular hours?
  3. Are you regularly reviewing your employees’ job classifications?

Free Advice Line for Employers

If you are unsure or answer no to any of the questions above, then contact Workplace Assured's Free Advice Line for employers on 1300 496 955 and let us help you.

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