IR changes set to cost casuals $39bn

By Cameron Micallef

December 08 2020
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The federal government is set to introduce new industrial relations laws that would offer an improved path to permanent work but also retrospectively cost casual employees billions.

The proposed changes will likely be introduced in a parliamentary bill sometime this week, and will include new settings for casual workers that give them more rights for ongoing employment, and also give employers limited liability on paying benefits such as casual leave loadings.

It is also likely the bill will address the issue of “double dipping” whereby employers may be required to pay sick leave and other leave entitlements on top of the 25 per cent casual loading meant to compensate for such benefits.

In addition, the reforms will introduce a new standard where casual workers who maintain regular shift patterns can have the option to move to part-time or full-time employment after one year.

Attorney-General and Industrial Relations Minister Christian Porter said the casual employment definition is likely broader than some business groups wanted, but also noted that the unions are likely to say the definition should be even broader.

“The business community estimates, among others, that if you don’t have that common sense fair offset provision, that the financial impost on the business community going back six years could be upwards of $39 billion, which could cripple a whole range of businesses at precisely the time that those businesses are struggling and need government’s assistance to grow out of the COVID-19 pandemic,” he said.

“So, this is about fairness, it’s about creating a clear distinction so that an employer knows, an employee knows, are they being employed as a casual and thereby receiving their 25 per cent loading, or are they being employed in some other way, as a permanent part-time or permanent full-time employee.”

Mr Porter said it suggests that the government has “struck the right balance on this issue and delivered a fair and equitable outcome that will benefit both workers and employers”.

The reforms come after an appeal that was granted to a Full Federal Court decision that ruled that casual employees working regular and systematic hours with “predictable periods of working time” are entitled to personal leave, compassionate leave and public holiday payments.

The ruling in the WorkPac v Rossato case meant that regardless of what their contract says and regardless of the payment of casual loading, casuals are likely to be considered permanent employees based on their nature of work.

In response to the rulings, Australian Industry Group chief executive Innes Willox said certainty needs to be restored without delay to encourage employers to employ the hundreds of thousands of casuals who have lost their jobs since the onset of COVID-19.

“The High Court’s recent decision to hear an appeal next year against the WorkPac v Rossato decision is very welcome, but the economic recovery depends on action being taken now by the government and Parliament to restore certainty,” Mr Willox said.

“The current uncertainty is stopping employers from hiring, and that is not in anyone’s interests.”

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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