Employers warn of ‘potentially devastating impact’ of Workpac judgment to casual workforce

Employers have warned businesses will be driven into insolvency unless the Coalition legislates to address a court ruling on casuals.

Jobs and Industrial Relations Minister Kelly O’Dwyer is considering introducing legislation or regulation in response to the ruling. Picture: AAP

Employers have warned businesses will be driven into insolvency, forcing taxpayers to pick up the tab for employee entitlements, unless the Coalition legislates to address a court ruling on casuals.

Australian Industry Group chief executive Innes Willox said new analysis highlighted the “potentially devastating impact” of the precedent-setting WorkPac judgment on small and medium businesses.

The Federal Court found truck driver Paul Skene, who was employed as a casual, was not a casual because of the regular and continuous nature of his work on a fixed roster, and was ­entitled to receive accrued annual leave pay.

Jobs and Industrial Relations Minister Kelly O’Dwyer is considering introducing legislation or regulation in response to the ruling.

The government is concerned about the potential impact on small business of employees being able to “double-dip” on their entitlements.

Employers estimate at least 1.6 million casuals work on a regular, ongoing basis, and the potential cost to businesses from having to pay annual leave to affected workers would be between $5.7 billion and $8bn.

An estimated 1.3 million casuals are employed by small businesses and about 800,000 casuals are engaged by medium sized businesses.

Mr Willox said the uncertainty caused by the court decision creates big risks for business, with small and medium businesses facing the “biggest threat”.

“The issue threatens thousands of jobs, including the jobs of young people who rely heavily on casual employment,’’ he said.

“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.

“Employees who have received a special loading as a casual should not be allowed to ‘double-dip’ by also claiming annual leave and redundancy entitlements.

“The cost risks associated with the court’s decision, unless addressed by Parliament, will drive many businesses, small, medium and large, into insolvency, leaving taxpayers to pick up the tab under the Fair Entitlements legislation.”

The NSW Business Chamber has applied to the Fair Work Commission to create a new “perma-flexi” employee category across highly casualised industries, in a bid to circumvent the court ruling.

The chamber, which represents 20,000 employers across 100 industries, will seek to have the new category inserted into six awards, including retail and aged care.

ACTU secretary Sally McManus has condemned the proposal, warning it would remove rights for millions of workers and lead to the rapid casualisation of the workforce.

ACTU secretary Sally McManus said Workpac engaged workers in systemic, ongoing and regular work “but called them casuals when they were not”.

“They took the risk, made it their business model and have been caught out,’’ she said. “The outcome in this case reinforces what courts have been saying for some time, regularly engaged workers are not casuals.

“For big business to suggest that somehow people who are genuinely in casual employment, that is irregular hours, non-ongoing work, will be impacted by this decision is simply not true and is designed to cynically further their own cause of making all permanent work more insecure and to avoid their legal obligations to their workforce.

“Their extreme response, is to create an even lower paid form of insecure work which will threaten permanent work.”