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Federal Court Rules Some Casual Employees Are Entitled To Paid Leave

An article regarding the Federal Court ruling that some casual employees are entitled to paid leave.

What an absolute can of worms this has opened up.

As a full time employee myself always wondered how “casual” employees managed to get bank or financial loans.
Also may its just me but blind Freddie could see one of the reasons people were employed as casual was a way for the employer to pay them less money and to stay competitive with every other employer.
I am glad that common sense has prevailed and people will be able to get more security for their employment.

Casual employee have loadings which indirectly pays for benefits such as sick and holiday leave. This is why casual rates are usually significantly higher than those who are part time employees (as the part time employees can accrue the leave and take when needed/desired. It is also possible that the pay rates to casual are not dissimilar to the hourly rate of part time employees when the value of the leave entitlements are factored in.

If the courts ruling is allowed set government policy moving forward, there would be pressure to remove the current loadings on casual employees such that any leave is not factored into the hourly rate. Otherwise it could be seen as paying twice for the same entitlements.

Many employees chose casual as they can’t guarantee minimum weekly work hours, like that which exists for part time or full time employees. It provides them with the flexibility to ramp up or ramp down their workforce to meet the business’ needs. This unreliability/variability of weekly work hours does pose challenges when seeking loans or credit…as past income does not necessarily equal future income.

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The decision was that casuals working full time hours on schedules reflecting permanent full time workers are covered. Not genuine casuals who work irregular hours on demand.

Further, the linked article states government may intervene on appeal or even legislate against it using the reason as the fragile economy.

There is also an argument that for a ‘casual’ working full time hours that loading in lieu is not as valuable as the entitlements they are meant to replace so employers have been using ‘full time permanent equivalents’ eg casual categorisation, to incorrectly minimise their payroll obligations.

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Apologies, I should have been more specific in relation to my reply is in relation to those captured by the court decision…not all casual employees,

What you have said is correct. As outlined above there will be pressure for loadings on the hourly rate for leave and such like to be removed, if government accepts this decision…otherwise, as also outlined above, it would be seen as paying twice for the same entitlements.

While probable, the correct outcome would be a cleaner clearer definition of a casual who deserves the loading, not being entitled to leave. Employers using the casual arrangement for those who are for all other purposes full time permanent staff was the problem. How it will go from here? I suspect I know, this being a coalition government, although TweedleXXX might do the same if in government at the moment.

I have been in a similar situation under a Labor State Government…a contingent/casual worker engaged with a GOC. As part of the employment agreement between my agency and the GOV, there were specifics in relation to loading based on the GOC enterprise agreement (and a 37.25hr week). The hourly rate was about 30% higher than the equivalent full time employee rate.

A benefit was I got was I was paid for every hour worked…rather than a salary based on 37.25hr per week. I usually worked more than 37.25 hours which mean’t I was ahead in relation to leave loading compensation. The downside was when things were quite or through unfavourable weather conditions, might not have got 37.25hrs

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I agree with what you have written for those working irregular hours.

However the news article is talking about people employed ongoing. The courts obviously took a view that those workers were not being paid what they should have been.
Also the on costs of a full time employee is to add another 40% on top of their salary. So someone on a salary of $50,000 with on costs being another $20,000 (40%). So the 30% loading is a saving of 10% for the employers.

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I can’t remember the exact percentages (but was about 1/3 more as rule of thumb) but when I moved to the GOC full-time permanent, the staff I had as casuals was more expensive than permanent staff in the same position (hourly rate comparison). One has to remember the agency also has fees which are an employment cost to the business.

EDIT: the reason why casuals were preferred even though they cost more was their support was needed on a project by project basis, so resources needed fluctuated based on number of projects underway. Projects ran for 12-18 months and using casuals did not pose a challenge to the business when projects ceased (if permanent employees it can be very difficult to reduce headcounts and it is far more traumatic for permanents to be let go than casuals).

One can split the percentages and all scenarios will be rounded or weighted in one way or another but numbers I worked with over decades varied from 30-50% of salary as the cost of entitlements for full time permanent staff. An average of 40% is probably justifiable (statutory holidays, sick leave, annual leave, long service leave, sometimes cost of backfilling during holidays are included in the computation as they need to be in many business environments).

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They are not “significantly” higher. Just high enough to cover the sick and holiday leave they don’t get. This has been argued for years… Permanent casual is an oxymoron. Employers prefer casuals as they are easier to “sack”
However, as someone else said, being a casual doesn’t guarantee a steady income, so casuals would have trouble getting a home loan etc and of course if they became ill…
I used to work in and industry where the Union wouldn’t allow casuals to be employed for more than a set number of weeks (can’t remember how many) after which they had to be put on the payroll. Naturally, once they are on the payroll, they no longer get the casual loading, so there is no question of “double dipping”
The current situation just highlights the problems of being a casual

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