Employers ‘exposed to $14.2bn in backpay’ after landmark casuals ruling

Of the 2.6 million casual employees in Australia, 1.35 million have worked regular shifts for their current employer for 12 months or more. Picture: istock
Of the 2.6 million casual employees in Australia, 1.35 million have worked regular shifts for their current employer for 12 months or more. Picture: istock

Labour hire firm WorkPac has sought special leave to appeal a landmark casuals ruling to the High Court, submitting new evidence claiming employers are exposed to $14.2 billion in backpay claims.

WorkPac will seek to overturn the full Federal Court ruling in May that workers on regular casual shifts will be entitled to seek paid leave.

Attorney-General Christian Porter said on Wednesday that the government would intervene in the High Court proceedings.

“Given the significance of the Full Federal Court’s decision, I can confirm, as I indicated the day after the decision that the Government will intervene in the appeal to the High Court,” he said.

“This Full Federal Court decision has caused confusion and uncertainty and has the potential to expose businesses to significant financial liability during a period where businesses are facing their greatest ever challenge.”

In a major win for unions, the court upheld a ruling that casuals who had worked regular and predictable shifts — and been paid a 25 per cent loading — were entitled to paid leave.

READ MORE:Awards up for grabs in deal world|‘Pandemic leave’ key to stop spread|Casuals ruling prompts warning

It rejected a bid by WorkPac to have a former employee, Robert Rossato, declared a casual employee and not entitled to paid leave.

In a statement on Wednesday, WorkPac said the Rossato decision would “overturn the commonly accepted understanding of casual employment in Australia, where employees receive a higher rate of pay in lieu of leave entitlements”.

“The court found that regular casual employees should be paid both the higher loaded rate as well as leave entitlements,” the company said.

“This judgment, if it stands, would expose tens of thousands of Australian businesses to double dipping backpay claims for up to six years. This would have a devastating impact on small, medium and large businesses already reeling from the COVID-19 pandemic.

“We seek for the High Court to restore sense and clarity to casual employment on behalf of WorkPac and the thousands of other Australian businesses affected by this decision.”

WorkPac has engaged Bret Walker SC and Ian Neil SC for its High Court app.

In economic evidence filed in support of the special leave application, the Australian Industry Group estimates the Federal Court decision, if it stands, would potentially expose small, medium and large businesses to up to $14.2 billion in double dipping claims.

Of the 2.6 million casual employees in Australia, 1.35 million have worked regular shifts for their current employer for 12 months or more.

Ai Group says the total aggregate cost of granting past annual leave entitlements to casual employees who work regular shifts and who have been employed for at least 12 months by their current employer would be approximately $10.3 billion

It says the total cost of granting past personal/carer’s leave entitlements to this category of casual employees would be about $2.3 billion, and redundancy pay would cost $1.6 billion.

Mr Porter said on Wednesday that given the potential for the full Federal Court decision “to further weaken the economy at a time when so many Australians have lost their jobs, it may also be necessary to consider legislative options”.

“I am continuing to take advice on potential legislative options,” he said.