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Employers are seething after a Federal Court decision on May 20 defined continuing contracts with the same employer as “permanent”, and not casual work.

Sounds strange? Not if your business model is based on the hire of workers on fixed-term contracts — which is how nearly 3 million people are employed.

Making employees feel insecure and in permanent competition for continuing work is one well-worn pathway for ensuring workplaces are compliant, wages stay low and conditions are minimal.

A full bench of the court found that people who work regular and ongoing shifts are entitled to paid leave, including sick leave, paid annual leave, paid personal/carer’s leave and paid compassionate leave. It said that simply paying the worker more — a casual loading — does not offset those other award obligations.

This ruling has provoked the ire of labour hire employers and the federal government. WorkPac, one of the biggest labour hire agencies, announced it will , and it has the support of federal Attorney-General Christian Porter.

The Federal Court ruling will affect 1.6–2.2 million regular casual workers, from retail and hospitality to mining and healthcare. The Financial Review estimates that employers face a “back-pay bill” of up to $8 billion. It’s about the same sum as just one company, , owes in unpaid taxes over 5 years, according to Michael West.

The Federal Court’s decision on the case, brought by Robert Rossato, upholds a previous ruling (WorkPac v Skene 2018) in which the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) successfully argued that a casual miner, with regular and predictable shifts, is entitled to permanent employee leave benefits.

Rossato, a miner, had been a casual for four years for multinational Glencore, Australia’s largest coal producer, which boasts of its “”. (Glencore had been on Michael West’s top until he was threatened with a lawsuit.) WorkPac had employed Rossato for six consecutive contracts: he successfully argued that his pattern of work was that of a permanent employee and that he therefore should receive the benefits of such.

Justice Mordecai Bromberg ruled that if employers fail to pay the National Employment Standard, which includes leave, they would be in breach of the Fair Work Act and could be fined.

Employer groups want the Fair Work Act to be changed, they say to prevent “double-dipping”. This term implies that workers are routinely cheating the system when, in fact, it’s the bosses who do.

More than 24% of Australia’s workforce, or 2.6 million workers, are casual. But this figure masks the real extent of the underpayment rort. 

Most sales assistants and salespersons, hospitality workers, carers and aides, sales support workers and food preparation assistants are . And when times get tough, such as under COVID-19, these people are considered expendable. About 1 million casuals were ineligible for JobKeeper because they had been with their current employer for less than 12 months.

The higher education sector is the country’s of casual staff, behind health- and social-care and retail. Casual teachers’ jobs and sessional teaching jobs are permanently at risk. “Sessional” teaching can mean being employed on an hourly basis.

Young people are more likely to be short-term casuals, , and are another cohort whom employers and the federal government deem to be in need of a pay cut. From last July, hospitality workers’ penalty rates were slashed and, if not for the pandemic, more insecure workers were in line for penalty cuts.

About 1.6 million of Australia’s 2.6 million casuals work in a regular, ongoing job. The law should be changed to ensure that bosses cannot get away with taking advantage of workers on insecure contracts while getting permanent hours out of their workers. This is the rort that needs to be fixed.

Fair Work Australia just found that almost 80% of labour hire companies have been underpaying workers or breaking the law in other ways. An audit of 63 labour hire employers in the building sector found that only about one-third were paying workers correctly, and most did not keep proper records or provide pay slips. Sixty-four per cent were short-changing workers. 

Commissioner Stephen McBurney said it isn’t in “the public interest” to name the employers, but the CFMMEU disagreed, saying that if the union had been found to be in breach of a workplace law, it would have been a different story.

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