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  5. Off-setting casual loading amounts – legislative amendments
14 Jan 2019

Written by Gemma Wheeler-Carver, Solicitor, Commercial Litigation

Effective from 18 December 2018, the government has introduced a new regulation into the Fair Work Regulations 2009 (Cth) in the wake of the Federal Court’s Skene decision (Workpac v Skene [2018] FCAFC 131). 

This decision found that Mr Skene was entitled to annual leave in line with the National Employment Standards (NES), finding that he  was a permanent employee for the purposes of the Fair Work Act 2009 (Cth), notwithstanding that his employment had been described as “casual” in his contract with Workpac and that, in Workpac’s submission, Mr Skene had received the benefit of casual loading amounts throughout his employment. The Federal Court found that this purported casual loading could not be set off against any entitlement to annual leave (or other benefits under the NES) as the loading had not been clearly expressed as an amount or percentage of his wages in Mr Skene’s contract or elsewhere, and because there was no other actual evidence which indicated that Mr Skene was a casual. The Federal Court did observe that, where a casual loading is clearly expressed, the employee would not be entitled to ‘double dip’ and an employer may be able to set off any casual loading amounts against any claim for NES entitlements.

The new regulation clearly set this out, providing that employers may make a claim to have any loading  amount paid to a “casual” employee taken into account in determining any amount payable by the employer to the employee in lieu or more NES entitlements.

This new regulation applies when the following criteria are met:

  • a person is employed on the basis that the person is a casual employee.
  • the employer pays the person a loading amount that is clearly identifiable as an amount paid to the person to compensate for the person not having one or more NES entitlements.
  • during the relevant period of employment, the person was in fact an employee other than a casual employee for the purposes of the NES (eg. because they fall under the criteria set out in Skene).
  • the employee makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements, eg. Annual leave, personal/carers/parental leave, long service leave, notice of termination of employment, and/or redundancy payments.

It is important to note that this regulation applies to employment periods before, on or after 18 December 2018.

Although this information can be recorded other than in an employment contract (eg. correspondence, payslips, Awards), and the new regulation does not limit its benefit to situations recorded in employment contracts, we would recommend that as far as possible, casual employees be employed under an employment contract and that it sets out at least that:

  • the employee is a “casual” employee;
  • an amount is being paid to the employee that is intended to compensate for the employee not having one or more relevant NES entitlements;
  • the amount does in fact compensate for the employee not having one or more relevant NES entitlements.

Please contact us at HHG Legal Group on 1800 609 945 or visit the website and complete an enquiry form, if you would like a review of your employment contract in light of this new regulation, or you require an employment contract or agreement prepared for your organisation, or wish to get further advice in relation to the treatment of casual employees under the Fair Work Act 2009 (Cth).

*This is general information only, and does not constitute specific legal advice. Please consult one of our experienced Legal Team for specific advice relevant to your situation.

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