Coronavirus: Dire business warnings over paid leave for casuals

Industrial Relations Minister Christian Porter. Picture: AAP
Industrial Relations Minister Christian Porter. Picture: AAP

More than 500,000 businesses say a Federal Court ruling that entitles some casuals to paid leave will deter them from hiring casual employees, according to a new poll, while up to 123,000 businesses expect they will have to close.

As Industrial Relations Minister Christian Porter meets with union and employer groups on Wednesday to begin an industrial relations reform process, a Roy Morgan survey of 881 businesses showed 34.5 per cent of them believed they would be affected by the court’s decision.

The results of the survey, conducted by SMS on May 30-31, have been weighted based on the businesses’ turnover, number of employees, industry and location to reflect the total number of businesses in Australia.

Nearly one quarter of businesses (24.5 per cent), or 567,000 firms, said the court ruling, which found casuals who worked stable, regular and predictable shifts were entitled to paid annual, personal carers’ and compassionate leave, would discourage them from hiring casuals.

One-in-ten, or 245,000 businesses, said it would have a “large financial impact”.

There are about 2.6 million casual workers in Australia, 1.6 million of which have worked regularly for the past six months.

Another 5.5 per cent of businesses, or 123,000 firms, predicted they would have to close because they cannot afford the entitlements for casuals on top of the 25 per cent loading they already received.

Businesses may have to pay back six years of entitlements following the court ruling, which has been hailed by unions who say it will put an end to the “‘permanent casual’ rort”.

Australian Chamber of Commerce and Industry CEO James Pearson, who will participate in Wednesday’s IR planning meeting with Mr Porter, said as of Friday businesses had received letters of demand for back pay that could “devastate” those “already on their knees” during the COVID-19 pandemic.

“Business owners will be too scared to enter into a casual agreement with a potential employee while uncertainty remains around the definition of casual, leaving them potentially open to litigation,” Mr Pearson said.

“If the data is extrapolated countrywide we could be looking at up to half a million casual jobs under threat, equating to tens of billions in lost income and driving unemployment up towards 10 per cent.”

Forty-five per cent of the Queensland businesses surveyed expected the court decision would affect them, compared to 39 per cent in Western Australia, 33 per cent in NSW, 28 per cent in Victoria and 25 per cent in South Australia.

The majority of small and medium-sized businesses (54.4 per cent) with up to 200 employees and 36 per cent of larger businesses said they would be affected “in some way”.

“Two steps need to be taken without delay,” Ai Group chief executive Innes Willox said.

“First, the Fair Work Act needs to be amended to define a casual as “an employee engaged and paid as such” – consistent with the Fair Work Commission’s longstanding definition. Second, the Act needs to be amended to stop employees who have been engaged as casuals and paid a casual loading, claiming annual leave and other entitlements that the casual loading has been paid in lieu of.”