Ending " Permanent/Casual " !

A ruling by the Federal Court looks like costing employers hundreds of millions of dollars.  It throws the definition of a " casual " in doubt just as the Australian workforce is about to resume employment as the virus lockdown is starting to be lifted.

The court found that a " casual " worker who worked regular and predictable shifts with a firm advance commitment to work were not casuals and were entitled to be paid annual, sick and carer's leave.

This ruling has shocked employers.  Many feel it opens the door to " double dipping " because the hourly rate paid to casuals is usually twenty-five percent higher than for permanent employees to compensate for the paid leave loss.  If casuals are to be treated as permanent employees it will throw the whole idea of employment consensus into review.

The Australian Industry Group  which represents sixty thousand employers , said the decision would discourage employers from bringing on casual workers and  hurt the economy.   In recent times the permanent/casual has become an integral part of the Australian workforce because a major part of the business world simply does not have enough work need to employ a full time person.  As part of the " Gig  " economy, many casual workers had a variety of jobs that occupied their full working day.

Many employers are wary about moving a casual to permanent employment because of the court's attitude to dismissal.  Dismissing a permanent employee can be time consuming and costly if a business downturn makes that necessary.  It also necessitates meticulous record keeping to ensure that employment rules are accurate and that is avoided and replaced with a pay loading to compensate casual staff.

The casual employee is the  employers answer to the vagaries of the market place.  Several might be needed to cover a peak of business activity but employing even one permanent employee would be surplus for most of the business day.  This ruling seems certain to cause changes in business style to dispense with casuals.  Some restaurants may opt for counter service and do away with table service to reduce the work load.  The use of labour saving technology will become more attractive.

The timing of this ruling is critical.  We are starting a tentative emergence from this lockdown and most families have depleted their savings to some extent and may be in an austerity mood.  Many businesses will rely on casuals until they see which way the economy is going and the court has seen fit to throw doubt on the legality of offering casual work which does not include paid leave.

The fear in the business world is that employees who have been on a casual basis and paid a loading  may turn around years later and claim the entitlements of a permanent employee.   That loading was supposed to be compensation for the lack of paid holiday time.  What the court has done is throw a doubt on the legality of the way many small businesses  run their trading operation.

This ruling is unlikely to generate many new permanent jobs, but it is likely to make casual work much harder to find.  Many permanent/casuals will wonder if the court actually did them a service  !