CASUAL LOADING VS PERMANENT NES ENTITLEMENTS
FAIR WORK ACT
On 18th December 2018, the Fair Work Act was updated to clarify the interaction around casual loading entitlements for an employee that is actually a permanent employee. This is a positive for Employers as it helps to clarify recent issues in regards to casual loadings versus permanent employee NES entitlements.
An Employer may hire a casual employee, paying them casual loading rates and casual penalty rates. Along the way, that employee may cease to be ‘true casual’ due to working regular rostered hours that do not significantly vary. The casual employee becomes part of a normal roster and is really a permanent employee.
In that instance, while the Employer may still be paying the employee as a casual, they are in fact, a permanent full-time or permanent part-time employee.
Employment legislation has now been made clearer to ensure that an Employer can make a claim to off-set any request from an employee for permanent entitlements under the NES, against the casual loading that has already been paid.
For example:
Mark started as a casual labourer for a landscaping company on 14th July 2017, and was paid a casual hourly rate with casual loading. If he worked on a Saturday, the casual penalty rate applied, as did the casual overtime rate.
However, Mark was reliable and useful, so he became a regular part of the landscaping crew and worked every Mon-Thurs from there on in. Mark applied to the Fair Work Commission to be moved to permanent part-time (as his Employer disagreed) and to access back-dated annual leave entitlements (casuals are not paid annual leave).
The Commission accepted Mark’s argument that he was a permanent part-time employee, and the Employer was required to change his status from casual to permanent as of 14th October 2017 and backdate annual leave accruals for Mark.
However, with this clarification of legislation, the Employer can now also make a claim to deduct the casual loading (25%) and all casual penalties paid from the amount of the annual leave accrual.
Good news for Employers, that this is now clearer and more readily accessible under the Fair Work Act!
It always pays to regularly review your employee group, rosters and employment status to ensure you are paying people correctly and using people in the right way. Feel free to contact us for a review and assistance.