Business seeks new deal on casual employment

EWIN HANNAN
SEPTEMBER 25, 2018

Employers have applied to the Fair Work Commission to create a new “perma-flexi” employee category across highly casualised industries, in a bid to circumvent a precedent-setting court ruling they fear could cost business billions of dollars.

The NSW Business 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.

Under the proposal, outlined in a letter to commission president Iain Ross last night, employers would be able to convert a regularly rostered casual into a perma-flexi employee who would be paid leave entitlements, including annual and sick leave.

But the 25 per cent loading paid to casuals would be cut to 10 per cent, with NSW Business Chamber chief executive Stephen Cartwright acknowledging casuals converted to the perma-flexi category would be “worse off week by week” but would receive leave entitlements.

Employers would also have the capacity to increase or decrease employee hours from week to week, with overtime entitlements paid only after 38 hours were worked in a week.

Mr Cartwright said the action had been taken because employers were not confident federal parliament would change the workplace laws to adequately respond to the recent Federal Court WorkPac judgment.

The court found Queensland truck driver Paul Skene, who was employed as a casual for 2½ years, was not a casual for the purposes of the national employment standards in the Fair Work Act.

It found Mr Skene could not properly be considered a casual because of the regular and continuous nature of his work on a fixed seven-day-on, seven-day-off roster, so he was entitled to receive accrued annual leave pay on termination of his employment.

Jobs and Industrial Relations Minister Kelly O’Dwyer has sought legal advice about the ruling and the government is examining its potential impact on small and medium-sized employers.

It is understood proposed amendments to the Fair Work Act or changes to workplace regulations are among options being considered by the government.

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.

 Mr Cartwright said for the past 120 years, business had employed casual employees and paid them a higher hourly rate in lieu of annual leave and sick leave.

“The Federal Court’s recent decision in the WorkPac case indicated that some casuals can now claim both the casual loading and annual leave, and sick leave on top of this,’’ he said.

 “Australian businesses are stunned and understandably frustrated by this decision. It seems that under the current Fair Work laws, many casual employees have become something else.

 “The current system of modern awards has been upended and we must get this fixed as soon as possible.

“We cannot sit around and hope that the parliament that has not shown itself to be particularly interested in industrial relations regulations in any meaningful way will come around and deal with this.”

Under the employer proposal, the new “perma-flexi” employment category would be inserted into the general retail industry award, the aged care award, the security services industry award, the contract call centre award and the social, community, home care and disability services industry award.

“Our clients propose that the commission modifies the existing award provisions to establish a further category of permanent employment that aligns with the engagements prevalent in the relevant industries,’’ lawyers for the chamber said in their letter to Justice Ross

“The purpose of such a change would be to balance the realistic employer and employee needs in the relevant industries in the context of a technical and legal decision which has upended a historically accepted industrial paradigm. The proposed variations will simply work to preserve the pre-existing paradigm and thus re-establish the fair and relevant safety net in existence before the outcome in WorkPac”.

 Granting the variation would allow employers to “roster as needed” perma-flexi employees, with hours of work to increase or decrease from week to week “without the payment of overtime entitlements”.

 Mr Cartwright said overtime would be paid if an employee worked more than 38 hours in a week. Perma-flexi employees would accrue paid annual, personal, compassionate and community services leave in accordance with the national employment standards. They would also be entitled to notice of termination and redundancy provisions applicable to other permanent employees.

They would be entitled to a 10 per cent “flexible loading” in recognition that their hours could fluctuate and possibly result in a reduced quantum of total work hours than those applicable to permanent full-time or part-time employees”.

The application says the new category would prevent employers from being exposed to liability on a “double dipping” basis. “That is, employers can avoid paying a 25 per cent casual loading in lieu of paid leave as well as being subject to claims for unpaid leave entitlements,’’ it says.

 The NSW Business Chamber argued the changes were “not unprecedented”, submitting they closely reflected existing arrangements for daily hire employees in the meat industry.

It said the new clause was also “not too dissimilar” to provisions in the cleaning services award where a loading applies to allow employers to roster part-time employees to perform additional hours up to 38 per week or 7.6 per day without the payment of overtime.

Mr Cartwright said granting the application would deliver greater job security for some casual employees, allow businesses to retain flexibility over rostering, and ensure employees are fairly compensated.

“We expect full support for our application from the ACTU and unions that are party to these awards because the union movement has been campaigning publicly for some years now for casual employees to be given more security of employment, and our application will achieve this outcome for many employees currently engaged as regularly rostered casuals,” he said.