Don Farrell (SA, Australian Labor Party, Shadow Special Minister of State) | Link to this | Hansard source

I move:

That the Fair Work Amendment (Casual Loading Offset) Regulations 2018, made under the Fair Work Act 2009, be disallowed [F2018L01770].

This motion seeks to disallow the Fair Work Amendment (Casual Loading Offset) Regulations 2018, enacted as a result of the full Federal Court decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131, which concluded that a worker who was employed on a regular, predictable and ongoing basis was not a casual employee. The instrument was introduced by the government in December 2018, after the parliament had risen, as a desperate attempt to placate employer lobby groups and labour hire firms who had been exposed using and abusing casual employment as an avoidance device to deny workers their entitlements and rights under Australian law. On the other hand, this disallowance motion supports hardworking Australian workers who've been wrongly categorised as casual workers and have subsequently been deprived of their entitlements under the National Employment Standards, such as the right to paid annual leave.

The background of the making of the instrument has received much media attention and some hysteria from employer groups who are fearful that the past and current poor employment practices may be coming back to haunt them. For those unaware of the background, Paul Skene worked for WorkPac at Anglo's Dawson mine and then for a longer period as a fly-in fly-out worker, a haul truck operator, at Clermont mine, for about 2½ years. Critically, his rosters were set 12 months in advance on two occasions. He worked 12½-hour shifts seven days on, seven days off. He lived in the company camp and was flown in and out of work at the company's expense. Mr Skene was paid weekly at a flat hourly rate and filled in his timesheet each week. Despite the fact that his pay was claimed by WorkPac to be in lieu of annual leave and other entitlements, Mr Skene's flat hourly rate was 29.4 per cent less than that of the permanent full-time employees engaged by Rio Tinto working side by side with him.

This is a very important point. Despite the obvious similarities to full-time permanent employment, Mr Skene was called a casual. When his employment was terminated, in April 2012, he received no annual leave payout. His situation reflects what many employees hired through labour hire companies are experiencing. The court held that Mr Skene was not a casual and should have been paid annual leave under the National Employment Standards in the Fair Work Act. The court decided that there is an objective approach to determining whether or not somebody is a casual—that is, if the substance of the employment relationship is that of a permanent employee then they cannot be a casual. Over the 2½ years of Mr Skene's employment he had regular, predictable hours. The court found that he had a firm, advance commitment to his days or hours of employment.

The employer, WorkPac, argued that Mr Skene was employed as a casual under the agreement and, essentially, that they had the right to define him as a casual irrespective of the reality of his working arrangements. The court said that if WorkPac's arguments were accepted:

… an employee designated to be a casual but working a full-time pattern of work (eg 9.00am to 5.00pm, Monday-Friday) in on-going employment never gains an entitlement to take paid leave, irrespective of how many months or years that pattern of work continues.

That's at page 128 of the decision. The court rejected this argument, saying that the purpose of the National Employment Standards could be readily defeated if employers could simply designate an employee to be a casual irrespective of the true nature of the employment.

The full Federal Court decision affirmed that the common law objective test of casual employment applies to whether an employee is eligible for National Employment Standards entitlements under the Fair Work Act 2009 where the absence of a firm advance commitment as to the duration of the employee's employment or the days or hours the employee will work is the essence of casualness. The key indicators of an absence of a firm advance commitment are:

… irregularity, uncertainty, unpredictability, intermittency and discontinuity in the pattern of work of the employee in question.

As a consequence of Skene, where an employee has been employed pursuant to an award or enterprise agreement as a casual but the conditions of their employment do not satisfy the common law definition of casual, they may be entitled to claim unpaid National Employment Standards entitlements.

Employer groups responded to the Skene decision by claiming that the decision may allow employees employed as casuals under the instrument to double dip—that is, to receive a casual loading pursuant to that instrument but then also claim back pay for the National Employment Standards entitlements based on the common law definition of 'casual'. That is a claim I will address in a minute. Some employers have expressed surprise at the WorkPac decision while at the same time admitting that millions of Australian workers were working in similar arrangements to those of the WorkPac case—that is, as so-called casuals without any leave entitlements and in breach of the most basic workplace entitlements under the National Employment Standards in the Fair Work Act. Employers lobbied the government to take action on the basis that they want to be able to unilaterally determine who is and who is not a casual employee, which would further entrench insecure work amongst the Australian workforce.

The WorkPac v Skene ruling exposes wage stagnation and a chronic underpayment of workers in many industries dominated by large corporations. Despite the hysteria of the employer groups who have criticised moves to disallow this regulation, this Court ruling does not mean all casual employees on set rosters are equivalent to permanent employees. But what has been highlighted is that many working Australians are trapped in the same permanent casualisation trap as Mr Skene, and those workers deserve a real government response rather than this politically expedient regulation.

Australia is facing a crisis of insecure work, as I'm sure you're aware, Mr Acting Deputy President Gallacher, and less than half of all Australians now have a permanent full-time paid job with a right to paid leave. One-quarter of all employees—one in four, or more than half of young employees aged 15 to 24—are now deemed casual employees. According to the ACTU and the ABS figures, since 2013, when the Liberal and National parties came into government, casualisation has increased from 23.8 per cent to 25.1 per cent. Each one per cent is equivalent to an extra 120,000 people, so there are now an extra 154,000 people in casual jobs who would have been in permanent jobs had the 2013 ratio remained unchanged. But it's over a longer period that we can really see the alarming nature of this trend. In the last 35 years, casualisation has increased from 13 per cent of the workforce to that figure of 25 per cent that we see today. The permanent casual is now a significant feature of the Australian labour market. According to the most recent data, there are 2.6 million employees without paid leave entitlements, and up to 85 per cent of them work on a regular basis for their current employer. This is based on a range of statistical measures of regular work.

Finally, we have the fallacious claim by employer groups that the full court decision somehow constitutes double dipping. Employer groups argue this is because casual employees are paid a loading to compensate them for other entitlements. So they say that having to repay employees the most basic of National Employment Standards entitlements as well is a double payment. The Federal Court found that Mr Skene was not a casual and in fact was paid 29.4 per cent less than the equivalent full-time employees even with the casual loading, so it's difficult to argue that double dipping occurred here. The fact is, as the Federal Court found, any double dipping here has been performed by the employer because they've taken advantage of the insecurity of casual work while still getting permanent hours out of their workforce for less cost. We often see examples of people working side by side doing the same job with the same hours but one is being paid as a casual on less money with no entitlements and the other as a permanent employee with full entitlements. Casual work is meant to be just that—casual. And using casual contracts for jobs that are, in fact, permanent is an abuse.

The Fair Work Amendment (Casual Loading Offset) Regulations 2018 should be disallowed. It's a politically expedient and pointless attempt by the government to try to show employer groups that they are doing something. We know they have no plan for our country. We know they have no plan to deal with flat-lining wages, wage theft, job insecurity, rising prices, low rates of economic growth or anything else that is important to the lives of most Australians. I urge all senators to support this disallowance motion.

Zed Seselja (ACT, Liberal Party, Assistant Minister for Finance, Charities and Electoral Matters) | Link to this | Hansard source

The government won't be supporting this disallowance motion. This motion would remove a protection for small business, in particular, against claims to pay leave entitlements twice to casual employees. The regulation makes clear that an employer who engages a casual employee and pays casual loading can rely on that payment if later found to be liable to pay leave entitlements applicable to non-casual employees. Employers estimate that the liability to make payments twice could be as much as $8 billion. No reason has been advanced as to why this protection, which clarifies the common law, should not continue to provide this protection for small business.

Mehreen Faruqi (NSW, Australian Greens) | Link to this | Hansard source

I rise on behalf of the Greens to make a short statement on the disallowance of the Fair Work Amendment (Casual Loading Offset) Regulations 2018. We all know that casualisation is up. We know that rising job insecurity is stretching people to breaking point. Working people are under attack like never before. They now have less certainty and fewer rights at work than at any time in recent history. Let me be blunt: insecure work is wrecking people's lives, yet this government is only about protecting big business. We know employers are abusing the use of casual employment by hiring workers as indefinite casuals or on rolling contracts. They do this so they have no obligation to provide long-term job security or minimum entitlements, like sick leave or annual leave, and this government is in the business of making that easier. They're making it easier for big business to exploit workers. They're making it easier for employers to claim that they didn't know the rules when they have clearly been established by the recent Federal Court of Australia decision in WorkPac v Skene. The case highlighted the fact that casual employment is being used widely by employers to deny workers even the most basic of entitlements under the National Employment Standards. The decision reaffirmed earlier court decisions in reiterating that just because an employer chooses to classify a worker as casual doesn't mean that the worker is indeed casual. We know that employers are trying to get out of paying entitlements to their workers. Through this regulation the government is now saying that, when employers are caught out treating someone as a casual who in reality is a permanent worker, the employer should be able to rely on their own wrongdoing to avoid paying the worker their full entitlements.

The Greens have been pushing for years to legislate for fair working conditions, legislation that would ensure that we have equal pay for equal work no matter whether you're classified as a casual or whether you work in the gig economy. For this government, though, everything is about being run for profit. It's all about systems that favour the wealthy and the big corporations. We know that wages have flatlined and too many people are in insecure work. We will fight any moves to cut the pay of this country's lowest-paid workers. Wage growth has stagnated, penalty rates have been cut, inequality is rising and underemployment remains stubbornly high, and casual workers are feeling the brunt of this big shift. The Greens have always stood up for casual and low-paid workers. We were the first to introduce legislation to bring back penalty rates and introduce bills that would extend minimum standards to all workers and allow long-term casuals to convert to full-time or part-time employees. The Greens will support this disallowance motion.

Scott Ryan (President) | Link to this | Hansard source

The question is that the motion moved by Senator Farrell be agreed to.