Labor Casual Loading Regulations Disallowance Motion op-ed

Labor Casual Loading Regulations Disallowance Motion op-ed

There is little more amusing in politics than the idea Labor is a friend of small business. Imagine you were unfairly forced to pay employee entitlements twice over, all because your “friend” was desperate to please the big bully they see behind your back. That’s exactly what small business will endure if Labor succeeds in a plan it has to disallow an important regulation.  

It’s been quite the ride for small business since WorkPac v Skene last year, where the Federal Court ruled that WorkPac casual worker Paul Skene was not in fact a casual employee for the purposes of the National Employment Standards, but a permanent employee entitled to annual leave. This was despite WorkPac having hired Skene on a casual basis and - importantly - having paid him well over the hourly rates paid to permanent employees as a loading to compensate him for his leave entitlements.

The Court, unfortunately, did not address in its decision whether casual loadings could be offset against the entitlements of full and part-time employees.

Businesses who hire casual workers were thrown into a state of uncertainty. It opened up the possibility of claims that would force employers to back-pay not just annual leave but also sick leave, redundancy and other entitlements on top of the casual loading they’d already paid to employees.

It amounts to, in essence, a “double dipping” on the subject of leave entitlements.  Small businesses - already stretched to the limit by inflexible workplace laws and high energy prices - just can’t afford to double-pay six years’ worth of employee leave entitlements in one big bill.

Indeed, class actions have already been filed seeking combined back pay of up to $325 million. More are being threatened. The total cost to the economy is estimated at up to $8 billion. It would cripple many small businesses and put millions of jobs, including casual positions, at risk.

The Liberal National Government offered a sensible solution.  They made the Fair Work Amendment (Casual Loading Offset) Regulations to clarify that employers should get a credit towards any back pay owing for loadings already paid to casuals in this situation.  Not the wage itself, just the casual loading.  If there was still money owing after offsetting the loading already paid, then employees would remain entitled to that payment.

Last week, Labor decided to move a motion to disallow that measure. If it succeeds, small business would again face this expensive vulnerability.  The senate vote is likely to take place on 2 April.

Why would Labor want to disallow a regulation that provides certainty to employers and employees alike?  It could be incompetence or ignorance.  Unsurprisingly, the same day that Labor’s Shadow Cabinet endorsed the motion, ACTU Secretary Sally McManus was spotted in Canberra. Labor has once again bowed to its union masters.

The ACTU would love nothing more than to take the issue of workplace casualisation to the next election and suggest that the Coalition would hurt casual workers.  No doubt they will try and muddy this issue as much as is possible with that of casualisation.  

The irony of it all is in the same week the Regulation was made, the Coalition introduced legislation to give all casual employees who work for an employer long-term the right to seek conversion from casual to permanent employment.  The Coalition offered a solution for casual employees that Labor never even attempted when it was in government.  

Industry has never been more united on an issue. As soon as Labor’s motion got up, employer bodies including the ACCI, AIG, the Australian Retailers Association, the RCSA (Australia’s peak body for the recruitment and staffing industry) and more were lining up to slam Labor over the move. They have unanimously called on the Senate to reject the motion.

Employers must comply with their legal obligations and pay workers their full entitlements. But it’s patently unfair that they should be forced to pay entitlements twice.

At the end of the day, Labor can provide no valid reason for Labor to support the disallowance motion. If Labor were a true friend of small business or the 40% of workers employed by them, they would cut the strings of their union puppeteers, withdraw their motion, and pledge to end uncertainty over double dipping claims.