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In breaking news, and some good news for Australian businesses, the High Court has just this week, overturned a decision that was set to see long-term casuals receive paid leave entitlements.
Want to know what this High Court win means for employers?
Read more from your trusted team of Gold Coast business accountants at Crest to find out.
How did it start?
In 2020, the Federal Court of Australia ruled in favour of Robert Rossato, a casual mine worker who made a claim against his employer, WorkPac. It was deemed that this employee’s casual contracts with the labour hire company classified him as a permanent worker with rights to backpay.
This was a decision that understandably, shocked Australian employers. Would they themselves be forced to spend billions on back paying their own casual workers? It was forecasted to cost Australian businesses $40 billion nationally, if the High Court upheld the ruling.
This landmark ruling was a key driver of the federal government’s own industrial law reforms in 2021.
The overturned, unanimous ruling explained
As you can already appreciate, there’s common law practice involving casual employment.
It’s well known that casual employees enjoy a higher hourly-rate (typically 25% more) at the expense of foregoing paid leave entitlements (holiday, annual, sick leave, redundancy or otherwise).
What did the High Court have to say?
The Judge said:
“The contractual arrangements between WorkPac and Mr Rossato did not include a mutual commitment to an ongoing working relationship between them after the completion of each assignment.”
Australian Chamber of Commerce and Industry acting CEO Jenny Lambert, went on to state:
“The decision was a vindication for hundreds of thousands of employers who were thrown into distress and disarray by the early Federal Court decision.”
What does it all mean?
Essentially, this overturned ruling is a big win for businesses.
It’s confirmation that if the contract you sign says you’re casual – you’re casual, not part-time or full-time, with it having nothing to do with if the work you’re completing is genuinely casual in nature.
Now, it’s back to the way it was and will continue to be, for the foreseeable future.
The High Court decision has the potential to help businesses such as Uber and Deliveroo stand up and fight off increasing challenges to their business modelling.
What next?
Employment contracts, rights and responsibilities of employees (casual, part-time, full-time and even independent contractors) and their employers will continue to evolve.
A reliance on casual staff, who sometimes admit to feeling compelled to work when sick, in Australia is definitely something that needs to explored in the future.
But for now, business owners can breathe a big sigh of relief with thanks to this overturned ruling.
Do you need help with business structuring?
Reach out to Crest Accountants today for highly effective personal and business accounting solutions.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.
