The Federal Government recently varied the Fair Work Regulations 2009 to allow employers, in certain circumstances, to claim an offset of an employee’s casual loading against any NES entitlements owing to the employee, where the employee was incorrectly classified as a casual.
The regulations were a response to the Skene case (see our article from last year), whereby a casual employee was deemed by the Federal Court to be a permanent employee and ‘double dipped’ by also successfully claiming an entitlement to annual leave. The amended regulations were intended to limit the potential liabilities of an employer who had paid a casual loading against also being ordered to pay leave and other NES entitlements.
The new law allows the employer to set off certain casual loadings paid against their entitlements under the NES, thus limiting the potential ‘double dipping’ by the employee.
For an employer to rely upon the new protections, it needs to meet all of the following criteria:
the employee is employed by the employer as a casual;
the employer pays that employee a clearly identifiable casual loading to compensate the employee in lieu of entitlements under the NES;
despite being classified as a casual by the employer, they were in fact not a casual;
the employee makes a claim for payment for NES entitlements they hadn't received.
Labor Promises to Rescind New Law
The Federal Labor Party has however reportedly vowed to seek to rescind the new regulations, possibly as soon as the April sitting of Parliament.
ERS Comment - the Skene Case and the new regulations make clear that employers need to be clear about the employment status of their employees. ER Strategies provides clients with employment template that help make that status clear.
If you have any questions relating to the outcome of this case, the new law or engaging casual employees generally, please do not hesitate to contact ER Strategies on 1300 55 66 37.