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‘Going backwards’: Govt plan could strip casuals of $39b

Waiter packing up cafe or restaurant chairs
Here's what the bill means. Image: Getty

A Government plan to build a pathway to permanent employment for casual workers will also strip current casuals of as much as $39 billion in claims, unions are warning.

Industrial Relations Minister Christian Porter will this week table new laws that will include a statutory definition of casual work designed to prevent workers carrying out permanent or part-time hours from being misclassified as casual and therefore missing out on leave entitlements.

What does it mean for workers and bosses?

The laws will introduce a minimum standard for permanent conversion, meaning that workers can request permanent work after 12 months in casual employment, provided they had previously worked regular shift patterns.

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Employers have the right to refuse employees’ requests if they have “reasonable grounds” to do so.

However, the bill will also protect employers from $39 billion in back pay claims.

Under the proposal, employers who are found to have kept technically permanent staff on casual contracts would be protected from having to fork out $39 billion in leave entitlements by using casuals’ 25 per cent loading.

It comes after the major WorkPac v Rossato court ruling earlier this year which found casual workers who had regular and predictable hours were owed leave entitlements and redundancy pay, going as far back as six years. That same ruling found that employers couldn’t use casuals’ 25 per cent loading to offset this entitlement.

Porter had previously said businesses would owe as much as $39 billion under that ruling if it was applied across the country.

Unions hit back

“Even though we know so many casual workers are not paid more than permanent workers, it also retrospectively takes away rights they would have to paid leave. Casual workers who are incorrectly classified by their employers currently have this right, this legislation would take it away,” Australian Council of Trade Unions secretary Sally McManus said on Monday.

“This is a huge missed opportunity to begin to make jobs more secure and turn around the number of causal and insecure jobs. Instead, this proposal will entrench casual work.”

She said the proposal also does little to help casual workers transition into permanency and allows employers to legally label workers as casual even if they are effectively working a permanent role.

“The proposal makes it almost impossible for casual workers to convert to permanent work and if an employer is unreasonable or does not offer them permanent employment, there is little they can do about it.”

Labor industrial relations minister Tony Burke also warned that casuals’ current right to leave if they transition into permanency will “disappear with the stroke of a pen” if the legislation passes.

An end to uncertainty: Porter

While the full bill isn’t due to be released until Wednesday, Porter said it will aim to cut the confusion around casual workers.

He said businesses are waiting to hire casual workers but uncertainty is preventing them from diving in.

“These are significant reforms which together will solve the problem of uncertainty, provide better avenues for job security, remove the burden of double-dipping claims and recognise employee choice," Porter said.

National employer association AI Group chief executive Innes Willox said WorkPac v Rossato had been a major deterrent to businesses taking on casual workers and said businesses were worried about the potential $39 billion liability.

"What is needed is a clear definition of a 'casual employee' in the Fair Work Act – one that can be ready understood and applied by employers and employees,” Willox said.

“Just as importantly, legislation is needed to prevent people who have been engaged and paid as a casual from pursuing claims for entitlements which the 25 per cent casual loading has been paid in lieu of. Allowing 'double-dipping' is obviously unfair.”

Willox said that while the High Court will hear an appeal against the WorkPac v Rossato ruling in 2021, the Government needs to take action now to “restore certainty” to the labourforce.

“The current uncertainty is stopping employers from hiring, and that is not in anyone's interests," Willox said.

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