Labor is pushing to overturn a ban on workers “double dipping” on casual loading and leave entitlements from their employers, sparking outrage from business groups.
In December last year, an amendment was made to the Fair Work Act designed to stop employees retaining the casual loading they had been paid but also demanding annual leave entitlements, if they had been paid as a casual but are subsequently determined to be a permanent employee because of working regular hours.
Under that amendment — formally known as Fair Work Amendment (Casual Loading Offset) Regulations 2018 — employers could have the amount of casual loading already paid to the employee taken into account when determining whether additional entitlements are owed to an employee.
However, Labor Senator Don Farrell (pictured) is set to move a motion to have this amendment disallowed. His motion is due to be heard in the Senate on Monday (16 September).
Innes Willox, head of the Ai Group, said in a brief statement that the disallowance motion was “dangerous” and would threaten the livelihoods of small business operators.
“It is vital that the Senate opposes Labor’s disallowance motion for the Fair Work Amendment (Casual Loading Offset) Regulation 2018,” he said.
“The regulation was made last year to give businesses more protection against unfair ‘double-dipping’ claims by casual employees. It is obviously unfair for an employee who has been engaged as a casual and paid a casual loading to be able to pursue years of back pay for annual leave.”
According to Mr Willox, “ABS statistics show that 80 per cent of casuals work for businesses with less than 100 employees”, making the issue “of great concern to thousands of small business owners whose livelihoods are threatened by potential ‘double-dipping’ claims”.
“The disallowance of this regulation would send a very dangerous signal to the CFMMEU and plaintiff law firms who are currently pursuing ‘double-dipping’ class actions against employers. Labor’s disallowance motion needs to be decisively rejected,” he said.
The Australian Chamber of Commerce and Industry (ACCI) tweeted that “the reckless ALP motion takes a wrecking ball to the confidence of small business when they need it most”.
Meanwhile, Employsure’s senior employment relations adviser, Michael Wilkinson, labelled the motion “a backflip on a long-held position that an employee receives either casual loading or permanent entitlements, but not both”.
“Small business owners are already facing a complex web of red tape and a raft of workplace relations legislation that is constantly being amended by the workplace relations tribunal,” he said.
“To complicate the matter further, the term ‘casual employee’ has no precise definition in the Fair Work Act, and is largely defined by court decisions, leaving small business without clarity.”
Such significant uncertainty is causing many business to question the “viability of offering casual work”, Mr Wilkinson said, acting as a drag on employment growth within the nation’s largest source of employment: small business.
“The concern is that the uncertainty and proposed backflip to disallow the regulation will reduce employment opportunities nationally as businesses explore alternatives,” he said.
“Casual work is about providing flexibility and productivity benefits for employers and employees. However, in this state, it is difficult to say that casual employment achieves anything more than meeting a very niche requirement for a small number of employers.”
Senator Farrell’s office was contacted for comment on the disallowance motion.
December’s regulatory change was designed to alleviate business concerns about a Federal Court ruling against Labor hire firm WorkPac which found that a casual worker who worked regular, predictable hours should be classified as a permanent employee, and this entitled to paid annual leave and other entitlements.
At the time, business groups reacted angrily to the ruling, claiming that it effectively allowed workers to double dip by picking the casual loading and still demanding the entitlements of a permanent employee.
James Pearson of the ACCI said at the time that it had the potential to “create billions of dollars in liabilities for Australian businesses”.
The motion was subsequently squashed by the Senate, albeit by a fairly narrow margin.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.