New laws for setting off casual entitlements

Over the next few days I will post several summaries about recent changes to the Fair Work Act which are intended to remove some anomalies about casual employment in Australia. The changes only impact upon national system employers and their employees.

In addition to the provision of a new statutory definition of what constitutes casual employment, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 mandates that the courts must allow for a notional set off by an employer against any liability found owing an employer to casual employee who later claims to have been incorrectly classified as a casual and who is found to be entitled to:

  • paid annual leave;
  • paid personal, carers’ or compassionate leave;
  • payment for public holidays;
  • payment in lieu of notice of termination and
  • redundancy pay.

The court must reduce the underpayment claim by an appropriate amount namely the proportion of the loading amount paid by the employer for any of those entitlements if identifiable as compensation any of those entitlements.