Annual leave ‘pay coup’ could backfire for some regular casuals’

A landmark court ruling that granted ‘regular casuals’ annual leave benefits is a major win for many ‘gig workers’, with those in retail, hospitality and healthcare, which accounted for over half of all casuals in 2018, among the biggest beneficiaries.

However, what should be a cause for celebration by many of the country’s 289,000 workers engaged by the healthcare sector over the past four years – especially those working in the demand-driven NDIS sector – could end up delivering more sinister implications than anyone, least of all the high court anticipated.

Jason Cartwright CEO of one of the biggest recruiters of healthcare workers, Healthcare Australia suggested that the new ruling, regarded by many as a ‘double-dipping’, could lead to fewer nurses on wards which could compromise patient care and lead to longer waiting list delays.

But it’s not just healthcare workers likely to be caught in the crosshairs of the court ruling. The Australian Chamber of Commerce and Industry claims that the decision could force some small businesses to close – and subsequently create thousands of job losses.

Double-dipping unnecessary

Employers argue that the granting of annual leave is unnecessary given that there’s already a 25 percent casual loading to offset permanent employee entitlements. Despite it being ‘casual’, employers also argue that paying annual leave is unwarranted given the overt predictability of casual work – with most casuals working on a regular ongoing basis.

Cartwright claims that the prospect of having to pay ‘regular casuals’ annual leave could force hospitals and aged care centres to cut rostered casuals or ‘run short’. Such an outcome would only add uncertainty to the 25 percent of the sector’s workers, who as casuals, end up working on predictable rosters.

Based on Australian Industry Group estimates, the court decision will affect up to 85 percent of all casuals in the economy, and leave employers with a backpay bill of up to $8 billion. Backpay aside, businesses could also face potential penalties for not paying annual leave, even though a higher casual rate is paid on lieu of leave.

Despite fears of it fuelling greater uncertainty and insecurity amongst casual employees, the Australian Council of Trade Unions has warned the Morrison government to ‘step-back’ from any business efforts to have the court decision overturned.