Small business owners and workers are set to suffer if Labor and the unions have their way.
A recent Federal Court decision has exposed all businesses who employ casual workers on a regular schedule to claims for back-pay of leave entitlements, despite the fact that those casual workers have all been paid a loading as compensation for their leave entitlements.
While the Liberal National Government has passed a regulation to ensure employers won’t be unfairly forced to double-pay leave entitlements, Labor is proposing to reverse our decision, in a move that would cripple small businesses and put millions of jobs, particularly casual positions, at risk.
What’s the story?
Casual workers in Australia currently receive a higher hourly pay rate than full or part-time employees, in lieu of benefits such as sick or annual leave. This is called ‘casual loading’.
A 2018 Federal Court decision (WorkPac v Skene) ruled that a worker who had been employed on a casual basis, and paid well above the hourly rates of permanent employees, was entitled to annual leave. Unfortunately, the Court did not address whether casual loadings could be offset against the entitlements of permanent employees.
This opened businesses up to “double dipping” claims from present and past casual employees for leave entitlements on top of the casual loading they’d already been paid. To remove uncertainty for business and workers, the Government introduced the Fair Work Amendment (Casual Loading Offset) Regulations, meaning:
- Employers can offset casual loading already paid to an employee against any claims for entitlements made by that employee; and
- Any money left owing to the employee after offsetting the loading will still be paid.
- Labor has moved a motion in the Senate to disallow this measure.
Why should Labor’s disallowance motion be rejected?
If Labor’s disallowance motion succeeds, small businesses will be forced to back pay six years’ worth of employee leave entitlements in one big bill. It will cost the economy an estimated $8 billion. Worst of all, it will jeopardise millions of casual positions across Australia due to renewed uncertainty.
It is patently unfair to force employers to pay entitlements twice. It is also unfair to expect permanent employees to share leave entitlements with their colleagues while receiving a lower pay rate.
Everybody will lose if Labor and its union masters get this motion through.
What are others saying?
“The disallowance of the regulation would threaten the livelihoods of thousands of small business people and those who work for them… It is obviously unfair for an employee who applied for employment as a casual and who has been paid a 25 per cent casual loading throughout their employment to turn around years later and claim thousands of dollars in back-pay for annual leave.”
Chief Executive, Australian Industry Group
“Without [the Regulations], the confusion around entitlements will only get worse and small and family-run retailers will be crippled by the financial cost. The ALP will destroy casual employment by making it completely insecure, with businesses being forced to cut shifts or shut their doors entirely.”
Executive Director, Australian Retailers Association
“This motion would reopen a loophole to allow double dipping, which could cost businesses and society up to an additional $8 billion, and would threaten the viability of many small businesses, and the casual jobs they provide.”
CEO, Australian Chamber of Commerce and Industry
“It is hard to understand why the Labor Party would want to return to confusion and cause further uncertainty, which will have a huge impact on small business especially.”
CEO, Recruitment, Consulting and Staffing Association of Australia & NZ