In WorkPac v Skene (2018) FCAFC 131, a Full Court of the Federal Court of Australia held that an employee who was working as a casual employee, and who for most intents and purposes was a casual employee and paid as such, was nonetheless entitled to annual leave entitlements despite being paid a casual loading.
On 17 December 2018, amendments to the Fair Work Regulations 2009 (Cth) came into effect which from 18 December 2018 operate to allow a Court to make a declaration that an employee who was characterised as “casual” but who in the eyes of the law was in fact part time or full time, can have casual loadings offset from National Employment Standards entitlements.
The new regulation applies where all of the following criteria are met:
- an employee is employed by their employer on a casual basis
- the employee is paid a casual loading that is clearly identifiable as being an amount paid to compensate the person in lieu of entitlements that casual employees are not entitled to under the NES, such as personal or annual leave
- despite being classified by the employer as a casual, the employee is in fact a full-time or part-time employee for some or all of their employment for the purposes of the NES, and
- the employee has made a claim to be paid for one or more of the NES entitlements (that casual employees do not have) that they didn’t receive for all or some of the time that they were incorrectly classified as a casual
It is important to recognize that this statutory offset only applies to NES entitlements, not other entitlements that could be claimed by alleged breach of awards or enterprise agreements, such as shift loadings, overtime, penalty rates etc. Employers will also need to be able to rely on documentary evidence in the form of pay slips or written employment contracts that clearly identify the casual loading component payable.