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Parliament needs to act quickly to protect businesses and the community from "double-dipping" by casuals

"It is vital that Parliament acts quickly to protect businesses, employees and the community from the huge potential cost impacts of the Federal Court's decision in the WorkPac v Skene case. It would be very unfair to allow employees who have received a special loading as a casual to now be able to 'double-dip' by also claiming annual leave and redundancy entitlements. The significant potential costs involved could drive many businesses, small and large, into insolvency, leaving tax-payers to pick up the tab under the Fair Entitlements Legislation and trigger major job losses," Australian Industry Group Chief Executive, Innes Willox, said today.

"There are at least 1.6 million casuals who work on a regular, ongoing basis. The potential cost impacts of the Court's decision on employers for annual leave alone are between $5.7 billion and $8 billion, based on statistics from the ABS and the Household Income and Labour Dynamics in Australia (HILDA) survey (see Attachment).

"The very widespread and longstanding practice across virtually all industries is that an employee engaged as a casual and paid as a casual is a casual. It is very common for casuals to work on a regular and systematic basis for extended periods.

"In the WorkPac v Skene case, the Federal Court held that the term 'casual employee' in the Fair Work Act has no precise meaning and whether any employee is a casual for the purposes of the Act depends upon the circumstances. According to the Court, irregular work patterns, uncertainty, intermittency of work and unpredictability are the usual features of a casual employment arrangement.

"The Federal Court's decision is inconsistent with the whole notion of 'casual conversion clauses' which have been an important part of the award system for 20 years. Casual conversion clauses were inserted into awards because the evidence showed that a large proportion of casuals have no wish to be employed on a permanent basis. They either do not wish to lose their 25 per cent casual loading or they do not wish to lose the flexibility they enjoy, or both.

"Unless Parliament acts quickly, the litigation likely to result from the decision will lead to a big increase in business insolvencies and a big blow-out in the cost of the Fair Entitlements Guarantee scheme due to claims by casuals for annual leave and redundancy entitlements. It is evident that overseas litigation funders and their lawyers are already planning class actions.

"The uncertainty and risks for businesses created by the Court's decision threatens thousands of jobs, including the jobs of young people who rely heavily on casual employment.

"Parliament needs to amend Part 4-1 of the Fair Work Act without delay to prevent an employer being ordered to pay compensation or a pecuniary penalty in circumstances where the compensation would result in 'double dipping' by an employee who was engaged as a casual employee and paid as a casual employee at the time when the employment first commenced. Such an amendment is fair to employers and employees and should not be controversial.

"In addition, the Fair Work Act needs to be amended to define a 'casual employee' as, in effect, an employee engaged as a casual and paid as a casual, regardless of the pattern of work.

"This is the second time that Parliament has needed to act quickly to address problems caused by a Federal Court decision relating to casual employment. In 2001, the Workplace Relations Act 1996 needed to be, and was, amended urgently to address the adverse impacts of the Federal Court's decision in Hamzy v Tricon International Restaurants trading as KFC (2001) 115 FCR 78," said Mr Willox.

Media enquiries: Tony Melville – 0419 190 347