New casual loading offset provision to avoid double dipping

EXPLAINED: New casual loading offset provision to avoid double dipping

This is the biggest relief for business owners! so, there’s a new casual loading offset provision that has been introduced to ensure wrongly classified casuals cannot double dip and be back paid entitlements as a permanent employee in addition to keeping the casual loading they’ve already been paid. We now have clarity as to what we employers must do to ensure no double dipping by casuals will be possible moving forward and no permanent entitlement claims which have already been made will stand up in court.

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The way to avoid this is by having employment contracts in place with our casuals and those employment contracts stating some very particular things, which I will outline in a moment, and this will ensure that any past or future claims for permanent entitlements from that employee will now be offset against the casual loading that has been paid to that casual employee.

So this means that when an employee who has been described as casual, but through court proceedings it is determined that they are not casual, the court is now required to reduce any amounts that the employee could be entitled to by reference to casual loading amounts already paid by the employer to compensate for those entitlements. 

Let me just take a quick step back here for those of you who aren’t across the confusion that has existed in this space over the last few years – because the question of what makes a casual a casual has been a major source of uncertainty for employers in recent years due to some court cases like Skene and Rossato, there has been some instances where casuals have been able to claim they were not in fact casual because they had been performing such regular and consistent hours over time. And based on this and a number of other complexities which I won’t bore you with here, they were able to keep the casual loading they had been paid PLUS be back paid various entitlements that a permanent employee receives – essentially allowing them to “double-dip”. 

What has changed 

Now, employees whose employment contract states they are casual and states that the casual loading is a separate identifiable amount will remain so if, when they accepted the offer of employment, they were not committed to work in advance. This is now, regardless of whether the casual performs regular and consistent hours. In other words, regular and systematic casual employment will not of itself imply permanency. 

So this means we now have a way to avoid wrongly classified casuals from double dipping and being back paid permanent entitlements as well as getting to keep their casual loading they’ve been paid. 

Here’s the important part – You will only be able to avoid the double dipping situation where the employment contract states that the casual loading is a separate identifiable amount, paid in compensation for the employee not having at least one or more of the following entitlements:

  • Paid annual leave. 
  • Paid personal/carer’s leave.
  • Paid compassionate leave. 
  • Payment for absence on a public holiday. 
  • Payment in lieu of notice of termination.
  • Redundancy pay. 

I am also recommending to our clients that they also include the proportion of the loading amount attributable to each such entitlement. If you don’t know these amounts we can help you out with that. 

What to do now!  

There are 2 things you need to do to be able to access this new Casual Loading Offset Provision and avoid an incorrectly classified casual being able to claim permanent entitlements in the future: 

1. Give all casuals (existing and future) a copy of the casual employment information statement (CEIS). Just like you already give them the fair work information statement. Now you give casuals the CEIS as well. 

2. Put this new casual loading offset provision into your employment contracts or enterprise agreement asap to avoid double dipping so: 

IS THIS YOU – If you don’t have employment contracts for your casuals

1. Get casual contracts drafted that clearly state: 

  • The relevant entitlements the loading amount is compensating for.
  • The proportion of the loading amount attributable to each such entitlement. 

OR IS THIS YOU – If you do already have employment contracts for your casuals

1. Check if their employment contract states somewhere the relevant entitlements the loading amount is compensating for and the proportion of the loading amount attributable to each such entitlement.  

2. And if not – draft an amendment or variation and have the employee sign it. 

OR IS THIS YOU – If you have an Enterprise Agreement

1. You’ll need to review the wording to ascertain whether there is any ambiguity that the current wording is in conflict with the new casual conversion provisions.

2. If it is then you can make an application to vary their agreement using the new “Form F23C – application for the commission to vary an enterprise agreement to resolve uncertainty or difficulty.”

** And don’t forget as per our advice in our video on the new definition of casual employment, make sure the wording in your casual employment contracts: 

  • Meet the new definition.
  • Communicates the 4 determining factors.
    • Whether the employer can elect to offer work and the worker can elect to accept or reject work. 
    • The worker will work only as required according to the needs of the employer.
    • The employment is described as casual employment.
    • The worker will be entitled to a casual loading or a specific rate of pay under the terms stated in their contract, award or enterprise agreement.

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This information was provided with the intention of helping you find more clarity, confidence and peace of mind as you navigate your own journey as an employer. I would love to hear your thoughts on this, and if you think someone else would enjoy it please feel free to share it on.

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About The Author
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Jackie Strachan

Jackie’s passion for creating better Human Resources outcomes stems from over 20 years’ experience in the field and a drive for finding innovative solutions.
Her HR career has seen her hold both operational and strategic HR management roles across a vast array of industry sectors including retail, financial services, child protection, professional services, dental, state emergency services, Department of Justice, agency recruitment and IT.
Combining her experience in each specialised area of Human Resources (such as learning & development, recruitment, WHS and employee relations etc), Jackie leads HR Tactics with an industry-respected foundation of knowledge.