International Newsletter

Australia Employment Law Update

May 14, 2019
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Australia

There have been a number of changes to Australian employment laws in last few months including new leave entitlements, and Australia has seen significant changes in employment law.

This article provides a brief update on the notable changes including:

  • Casual employees “double dipping”;
  • Unpaid family and domestic violence leave being extended to all employees; and
  • Wage deductions in relation to award covered employees.

Casual employee “double dipping” update

The much publicized decision of the Full Federal Court in WorkPac Pty Limited v Skene [2018] FCAFC 131 caused significant concern among businesses.

In the case, the court determined that despite Skene receiving a casual loading of 25 percent over and above the minimum wage rate (provided in lieu of paid leave entitlements, redundancy pay, and notice of termination), he was more appropriately classified as a permanent employee and was therefore also entitled to receive the permanent employee entitlements in lieu of which the casual loading was paid, at the higher casual employee rate of pay.

The concern amongst businesses was that this created a situation where casual employees, after the cessation of their employment, could “double dip.”

WorkPac has not appealled Skene to the High Court of Australia, instead commencing a separate proceeding in the Federal Court of Australia seeking a declaration that another former employee, Rossato, was a casual employee and therefore:

  • is not entitled to paid leave under the Fair Work Act 2009 (Cth) or the relevant industrial instrument; and
  • WorkPac is entitled to set off payments made to Rossato against any entitlements that Rossato may have if he is deemed a permanent employee.

A number of interested parties have intervened in the Rossato case, including the Federal Minister for Jobs and Industrial Relations, the Construction Forestry Maritime Mining and Energy Union (CFMMEU), Skene, and the class action law firm Adero (on behalf of former WorkPac employee Beau Daniel Meaney).

In an attempt to limit a casual employee’s ability to “double dip,” on December 13, 2018, the government introduced new regulations into the Fair Work Regulations 2009 that allow an employer, which has paid an employee an amount that is “clearly identifiable as an amount to compensate for the loss of permanent employee entitlements,” to off-set that amount against any entitlement to which the employee may be deemed to be entitled.

Unpaid family and domestic violence leave extended to all employees.

Effective August 1, 2018, the Fair Work Commission inserted a model clause into all modern awards, providing award covered employees with five days of unpaid leave to deal with family and domestic violence.

This meant that employees who were not covered by a modern award (due to their position, or being covered by a workplace agreement) missed out on the entitlement.

On December 12, 2018, the federal government succeeded in introducing the same entitlement into the National Employment Standards in the Fair Work Act 2009 (Cth), which extends the entitlement to all employees.

This means that employees employed under registered workplace agreements created prior to August 1, 2018, or who were considered award free, will now receive the same entitlement to unpaid leave to deal with family and domestic violence.

Employers may want to review their workplace policies to ensure that they have appropriate training in place for their managers in circumstances that an employee seeks to access leave to deal with family and domestic violence.

Wage deductions in relation to award covered employees

Prior to November 1, 2018, employers could, subject to the modern award that applied to the employee’s employment, deduct from an employee’s final pay, an amount equal to the notice period that the employee failed to provide when resigning from his or her employment.

On November 1, 2018, the Fair Work Commission introduced a model clause into 104 modern awards, which limited employers’ abilities to deduct where an employee did not provide the required notice. Employers can now only deduct an amount from an employee’s final pay (a) if the employee is 18 years or older, and (b) if the amount is no more than 1 week of the employee’s wages.

As this model clause is only contained in the modern awards, it does not affect employees covered by registered workplace agreements.

Written by James Sanders of MST Lawyers and Roger James of Ogletree Deakins

© 2019 MST Lawyers and Ogletree, Deakins, Nash, Smoak and Stewart, P.C.