Back in May 2018 the Australian Institute’s of Future Work released an alarming study of ABS data to report that ‘insecure work’ was the new norm, as the full-time job rate hit a record low.
They found that over time, paid full-time employment with leave entitlements dropped to just 49.97% of the Australian workforce.
So many are asking what is driving this trend? Well if you look at the stats Australia is a nation of small business with over 40% of Australians being employed by the small business sector. We all know that running a small business can be tough, and back in July 2017 we shared with you how generous our leave system is in our blog Australia the lucky country but how do we measure up with the rest of the world from a leave entitlements perspective.
In this blog, we shared that Australian workers had access to 44 days paid leave per year which put us right up there with countries like Sweden and Norway in terms of our employee entitlements.
It is my belief that this could be one of the reasons driving this trend, particularly within the small business sector. The reason being that for a small business the cost of employing full-time permanent employees can be prohibitive, instead they may be more inclined to employ people under arrangements classified as insecure work. These would include casuals, contractors and the like. With 44 days a year of paid leave on offer why wouldn’t small businesses who are doing it tough struggling to make a profit want to try and hedge their bets employing people under such arrangements where you can fix your costs and avoid profit erosion caused by paying people for when they aren’t at work?
To make matters worse, a recent landmark decision may have changed the way all Australian employers look at casual employment. In the matter of WorkPac vs Skene, the Full Court of the Federal Court has upheld a decision that a labour-hire casual who worked regular a systematic hours was a permanent employee at law, and therefore entitled to paid annual leave, and all other relevant permanent employment rights, even though WorkPac paid him as a casual including a casual loading.
In November 2016 Federal Circuit Court Judge Michael Jarrett found the worker’s regular seven-day-on, seven-day-off arrangement, combined with the provision of a permanent room on site and fixed rosters provided 12-months in advance, implied a pre-determined schedule.
The regularity and predictability of work over a 24-month period meant the worker was entitled to annual leave under s86 of the Fair Work Act, and it was decided that Mr. Skene was entitled to $21,000 in compensation plus interest of $6,700 for accrued annual leave under the National Employment Standards (NES).
So what does this mean for Australian employers who currently have casual employees or permanent casuals or even contractors? Well, many would argue that this landmark case opens the floodgates for claims from casual employees challenging the status of their employment and demanding back payment of entitlements such as annual leave, redundancy, and notice of termination.
So how can you protect yourself? Our tips are that you should look at all your casual employees and ask yourself are they really casual? I.e. do they:
- Have more than 6 to 12 months service
- Work regular and systematic hours and consistently work 38 hours every week
- Have a roster that extends beyond 2 weeks
If you answered yes to all of one of these then you are most likely at risk! Is this fair? I would argue not and all, it really is a way for casual employees to double dip and many industry bodies and labelling the decision as extremely disappointing.
If you need assistance to look at options for addressing these issues then get in contact today.