Court rules casual workers are entitled to paid leave backpay worth $8 billion

A massive workplace “loophole” is coming to an end thanks to a landmark court ruling – and it’s a huge win for countless workers.

Millions of Australian casual workers could be in for a major payout after the federal court ruled they were eligible for paid leave.

Yesterday’s landmark decision means staff with regular shifts won’t be considered “casual” workers, even if that’s what their contracts state.

The ruling arose after mine worker Robert Rossato argued his previous employer WorkPac had labelled him a “casual” worker even though he worked “regular, certain, continuing, constant and predictable” shifts which were set in advance.

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While Mr Rossato had a 25 per cent casual loading included in his wages, judges ruled he was also entitled to leave on top.

It is estimated there are between 1.6 and 2.2 million “casual workers” in Australia, and the ruling means those employees could now be entitled to paid annual, personal, and carer’s and compassionate leave.

It has also exposed employers to potential backpay claims worth $8 billion.

The decision has been celebrated by workers and union leaders, with Australian Council of Trade Unions (ACTU) secretary Sally McManus claiming it had put the problem of casualisation under the spotlight and would end a “loophole” that disadvantaged workers.

“This is a huge win for the workers involved and their union the CFMEU, but it is also a win for all workers who are suffering because of systemic casualisation. It clearly demonstrates the need to reduce workplace insecurity,” Ms McManus said in a statement.

“We need the stop the practice of some employers labelling jobs ‘casual’ when they are in fact permanent. This has stripped workers of rights and security.

“It’s time for employers to accept that finding new ways to make permanent jobs casual has to end. We should be working together as a country to reduce the number of insecure jobs. It has got out of control and unfortunately too many people are now feeling the harsh reality of having no job protections during the pandemic.”

CFMEU National President Tony Maher also described the mislabelling of regular workers as “casual” as a “rort”.

“This is a fantastic decision that puts an end to the ‘permanent casual’ rort that has become a scourge in the coal mining industry and across the workforce,” Mr Maher said, according to 7 News.

Union leaders say the decision will end a long-running ‘rort’.

Meanwhile, Innes Willox, chief executive of the national employer association Ai Group, said the decision proved the need to update the Fair Work Act.

“Today’s decision of the Full Federal Court in the Workpac v Rossato case highlights the need for urgent legislative reform to provide certainty to businesses and casual employees, and to prevent double-dipping claims by casuals who have been paid additional remuneration in lieu of the entitlements of permanent employees,” Mr Willox said.

He said casuals made up around 20 per cent of the Australian workforce and that at least 1.6 million of the 2.6 million casuals in Australia worked on a regular, ongoing basis.

“The expression ‘casual employee’ needs to be defined in the Fair Work Act, in line with the common definition included in modern awards – that is, ‘a casual employee is an employee engaged and paid as such’. An employee engaged as a casual and paid a casual loading (or a loaded rate that accounts for a casual loading) should not be allowed to turn around years later and claim the entitlements of a permanent employee, like annual leave.

“With unemployment and underemployment rapidly increasing during the COVID-19 crisis, employers need to be encouraged to retain and take on casual employees – not deterred from doing so.”