In the recent decision of WorkPac Pty Ltd v Skene, the Full Court of the Federal Court found that an employee classified as a casual, working regular hours on a fixed roster for an extended period of time, may be entitled to accrue annual leave under certain circumstances.

The Federal Government has responded to this by introducing a new rule[1] allowing employers, in certain circumstances, to “off set” an employee’s casual loading payments against certain entitlements owed under the National Employment Standards (NES) (such as paid leave).

The new regulation applies where:

  • an employee is employed on the basis that they are a casual employee;
  • the employee is paid a casual loading in lieu of entitlements that casual employees are not entitled to under the NES, such as annual leave and personal/carer’s leave;
  • despite being classified as a casual, the employee was actually a full-time or part-time employee for the purposes of the NES; and
  • the employee makes a claim to be paid for one or more of the NES entitlements (that casual employees do not have) that they did not receive for all or some of the time that they were incorrectly classified as a casual.

If all of the above criteria are satisfied, an employer can seek to “off set” casual loading payments against relevant NES entitlements. This means that the employer may be able to subtract those casual loading payments from the total amount of any outstanding NES entitlements which are found to be owed to the employee.

Employers should still ensure that appropriate written contracts are in place, dealing with the agreed employment arrangements and any agreed off-setting arrangement, to reduce the risk of disputes about employment entitlements.

The new regulation comes into effect on 18 December 2018 and applies to employment before and after 18 December 2018.