Jobkeeper heartbreak, but casual workers could receive a massive payday

After not receiving any entitlements from the Federal government with regard to its Jobkeeper subsidy, casual workers have had a small win this week following a Federal Court ruling that could put $8 billion back in their collective pockets.

The landmark WorkPac v Rossato decision affects between 1.6 and 2.2 million casual workers across Australia – almost 20 per cent of the Australian workforce. It’s a positive outcome for casual employees, many of whom were struggling to pay rent following industry shutdowns caused by the COVID-19 pandemic.

The court found employees who had regular rostered shifts are not casual employees. This is contradictory to how they may be described in their employment contracts.

The new definition identifies ‘casual' workers as being entitled to paid annual leave, paid personal/carer's leave and paid compassionate leave.
Australian Council of Trade Unions (ACTU) secretary Sally McManus believes this closes the ‘casualisation’ loophole, whereby permanent employees are labelled as casual.

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McManus said, “It’s time for employers to accept that finding new ways to make permanent jobs casual has to end. We should be working together as a country to reduce the number of insecure jobs. It has got out of control and unfortunately too many people are now feeling the harsh reality of having no job protections during the pandemic.”

The mining union, which is in support of the decision has stated about 40 per cent of mining industry workers are employed as casuals, yet perform the same tasks as full-time employees, without job security and entitlements.

More than one million casual workers missed out on the $130 billion wage subsidy when it came into effect in April.

Many staff at local councils, state governments, universities, construction sites or in the arts and entertainment industry who were stood down or laid off, were not eligible for the $1500 per fortnight payment. They could apply for the Jobseeker payment, however at $1100, it was 36 per cent lower or $400 a fortnight less than Jobkeeper.

The systematic shut down of businesses and organisations caused a devastating ripple effect. For example, many casual employees who were forced out of rentals had to go cap in hand to landlords to ask for rent reductions or payment holidays. Many landlords unfortunately found themselves in the same boat, having been laid off or stood down and requiring the rental incomes for their own survival.

Back paid entitlements would help alleviate these pressures. However employer groups are concerned.

Could employers be forced to fork out $8 billion in entitlements?

There is no easy solution here. Backpayments to casual workers would help alleviate untold financial stress.

However, the Federal Court decision will no doubt affect many employers’ bottom lines, putting more stress on businesses who are now attempting to regain momentum as industry slowly gets back to work. If the $8 billion in backpay estimates are correct, many doors may not re-open.

“What appears fairly obvious on the face of the decision is that it has immediate practical implications for the bottom line of many Australian businesses at a time when so many have taken a huge hit from the COVID-19 pandemic,” Attorney-General and Minister for Industrial Relations Christian Porter said.

Porter hasn’t ruled out Federal Government intervention in the form of legislative options to reverse the decision.

The other factor to consider in this decision is whether employers will now be in a position to re-hire casual employees if they are faced with entitlement payouts.

As unemployment hits record highs during nation-wide lockdowns, this may not be the best outcome for either employees or employers. Certainly during this pandemic and beyond, employers need to be encouraged to retain and take on casual employees.

Whether the Federal Court decision impacts employer choice with regard to hiring staff remains to be seen, but what must happen is that all groups work together to mitigate against unemployment and underemployment.

Everyone needs to pull together to help get the economy up to speed as quickly as possible.