Businesses may not have to fork out $39b in back paid leave after an appeal over a controversial court ruling was granted.
Employers could be off the hook for billions of dollars in unpaid leave, with a landmark ruling to be challenged in the High Court.
The Federal Court ruled in May ‘casuals’ who worked regular shifts and had an understanding of continued employment were not casuals, and were therefore entitled to paid annual, sick and other forms of leave.
Mining worker Robert Rossato successfully argued his three-and-a-half year employment with labour company WorkPac amounted to permanent work disguised as casual work.
But WorkPac has been granted special leave to appeal the ruling in the High Court.
Industry has welcomed the appeal, after raising concerns the original ruling could create a system of ‘double dipping’, whereby employees were effectively paid twice for leave already included in casual loading.
The Australian Industry Group said the ruling caused uncertainty for businesses in an economy already struggling due to COVID-19.
“The Federal Court’s decision has alarmed businesses and is no doubt operating as a barrier to employers taking on casual staff,” the group’s chief executive Innes Willox said.
“With more than half a million casual jobs lost since March, any barrier to casuals being re-employed is not in the interests of employees or employers.”
The ruling had already sparked eight claims against employers, he said.
Attorney-General Christian Porter, who intervened in support of WorkPac’s application, has also backed the development.
He had previously pledged to clarify the ruling, which he argued could make businesses liable for up to $39b in back payments during the COVID-19 recession.
“Post-the decision, the employment status of over 2 million workers in Australia is accompanied by an unreasonable and unhelpful degree of doubt,” he said in September.
“The financial liability for businesses is unbelievable given the current economic climate.”
But CFMMEU mining and energy general president Tony Maher claimed the cost to business had been “hysterically exaggerated” and the granting of an appeal would delay justice.
“The Federal Court has twice confirmed that the widespread ‘permanent casual’ rort in mining is not only unfair, it is also unlawful,” Mr Maher said.
“The model embraced enthusiastically by big mining and labour hire companies is to replace good permanent jobs with lower-paid casual jobs and it’s a straight-out scam.
“Casual mineworkers do the same work on the same rosters, but they are paid about 30 per cent less and have no job security or leave entitlements.”
The appeal will be heard next year.
