Industrial Relations Minister Kelly O'Dwyer will apply to intervene in a test case over the definition of casual workers, after employer groups raised concerns about "double dipping" of leave entitlements.
Ms O'Dwyer will make an application to join the Commonwealth as a party to a case being heard in the Federal Court, which considers whether an employer can be required to pay twice for the same workplace entitlement.
WorkPac, the labour hire firm subject to a ruling that a casual truck driver employed by the company was entitled to paid leave entitlements, has filed a separate action seeking a declaration that another employee, Robert Rossato, was a casual employee and not entitled to leave.
The earlier decision by the Full Bench of the Federal Court has sparked concern among employers that it could lead to "double dipping" by workers who had already been paid casual loadings.
Unions argue this characterisation is misleading, as truck driver Paul Skene was paid 30 per cent less than the full-time employees he worked alongside at a Rio Tinto mine, meaning he was still worse off even after leave was paid on top of his 25 per cent casual loading.
Ms O’Dwyer said the government had decided to intervene in Workpac's latest case because of the "considerable concern across Australia’s three million small businesses and given the impact it could have on job creation and existing jobs".
It is understood that the new case, which Workpac is expected to pursue all the way to the High Court if necessary, also seeks to establish the right for employers to offset casual loadings against any leave entitlements they may be deemed to owe workers.
"If you're a casual and you've been paid a 25 per cent loading, it seems completely incongruous to think that that 25 per cent loading that would have paid for your holiday pay, all the rest, that you would be able to equally be paid for those holidays and other entitlements," Ms O'Dwyer said.
“Small businesses must be able to operate with clarity and certainty of the law, which will ensure not only their success, but the success of Australians employed in small businesses across Australia.
“The government is very concerned that the legal right to offset an obligation against payments already made for the same entitlements was not dealt with in Skene v WorkPac. We want to make sure the same thing does not happen again. It must be made clear that the fundamental common law right to offset is available to small business employers if it faces claims to pay for the same entitlement twice.”
Ms O'Dwyer said "clarity and certainty" of employer obligations strengthened compliance, "which I am sure both employers and employees would welcome".
ACTU Secretary Sally McManus said the court action "threatens the job security of all permanent workers".
"We will fight this tooth and nail," she tweeted.
ACTU President Michele O'Neil accused the Coalition government of "once again coming down on the side of big business and against the pay and rights of ordinary workers".
“The court has rightly exposed that big business has been cheating workers out of their entitlements," Ms O'Neil said.
"To use taxpayer money to undermine that decision shows how biased and out of touch Kelly O’Dwyer and the Morrison Government are."
She said there was "a long history of case law" establishing that workers who have fixed and continuous employment were entitled to accrued leave, and that only employers who were breaking the law should be worried about the WorkPac decision.
“Big businesses in the labour hire industry have been caught abusing the casual classification and they’re trying to escape paying working people the money they’re owed," Ms O'Neil said.
“Kelly O’Dwyer is helping them keep them myth of the ‘permanent casual’ alive and to strip workers of their rights."
The Australian Industry Group welcomed the government's intervention, saying that casual employment plays a vital role in Australia’s labour market.
"A loss in flexibility in this area would destroy competitiveness and jobs," Ai Group chief executive Innes Willox said.
“In the WorkPac v Skene case, the Federal Court held that the term “casual employee” in the Fair Work Act has no precise meaning and whether any employee is a casual for the purposes of the Act depends upon the circumstances. This is unworkable.
"The very widespread and longstanding practice across virtually all industries is that an employee engaged as a casual and paid as a casual is a casual. It is very common for casuals to work on a regular and systematic basis for extended periods."
Mr Willox said one in every five Australian worker is a casual employee, with more than 80 per cent of casual employees working for small and medium businesses with fewer than 100 staff members.
The Australian Chamber of Commerce and Industry said the government's intervention would protect small businesses from billions of dollars of unbudgeted liabilities.
It said the regulatory and legal implications of the WorkPac decision were alarming.
“The decision does not just apply in coal mining or for labour hire, but to potentially over a million casual jobs," ACCI chief executive James Pearson said.
“Small business is unacceptably exposed to claims for double-dipping, paying for leave once through a casual loading, and then again through possible claims after people leave their jobs," he said.
The CFMEU, which brought the case against WorkPac on behalf of Rio Tinto truck driver Paul Skene, said the federal government intervention would give big mining companies the green light to keep exploiting casual workers in permanent, on-going roles.
The union said industry group concerns about a multi-billion dollar outbreak of worker ‘double-dipping’ affecting small business was a distraction from the systematic casualisation of permanent jobs by big business.
National president Tony Maher said the Skene decision had responded to exploitation of casual workers by the world’s biggest, and richest multinational mining companies. He said the federal government intervention was a "slap in the face for casual workers".
“Mining companies have been ruthless pioneers of the ‘permanent casual’ work model," Mr Maher said.
“WorkPac supplies labour to global mining giants BHP, Glencore and AngloAmerican. Paul Skene worked at a Rio Tinto coal mine in Central Queensland. These are no mum-and-dad outfits."
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