Many employers are facing the real risk that their casual workers can “double dip”, and get paid their annual leave twice. 

How can this happen?

This situation has arisen out of recent Federal Court case, WorkPac Pty Limited v Skene [2018] FCAFC 131.   In this case, the employee was employed as a casual by the employer, but due to their working arrangements, was held by the Federal Court to be a permanent employee.

As a result, the employee was entitled to any unpaid annual leave. 

Now, the employer argued that they had already paid the employee their annual leave by virtue of the casual loading included in the employees base hourly rate of pay. 

But the annual leave loading was not specifically detailed in either the employment contract, nor the payslips provided to the employee.  And as a result, the employer was unable to prove that they had in paid annual leave and ended up having to pay it twice.

And this is what I see many employers do.    Hence why I believe many employers who use casuals are facing the real risk that their casual workers can “double dip”, and get paid their annual leave twice.

How do you reduce the risk of this happening?

The key problem is that the employment agreement and pay slips only disclose one rate of pay of $X per hour, with no breakdown of this. 

Instead, it is my opinion that the employment agreement and pay slips should break down the components of the hourly rate so that there is clear visibility of what has been paid.

Let’s use the example of Desiree who you want to employee on a casual basis for a cost of $25 per hour (being base rate of for a permanent employee of $20 per hour and the applicable casual loading of 25 per cent which equates to $5).

Rather than quoting the one rate on the employment contract of $25 per hour, there needs to be at least two rates being:

• $20 per hour base rate of pay;
• $5 per hour casual loading to compensate the casual employee for not having one or more relevant National Employment Standard entitlements during a period.

The pay slips should then split the pay between base rate of pay and casual loading.  If Desiree works 10 hours, her pay slip shows $200 base pay and $50 casual loading.

Then should you ever be in a situation where a casual worker is deemed to be a permanent employee, you can show that you have paid them annual leave and other entitlements by way of the casual loading, and you significantly reduce a casual workers ability to “double dip” and get paid twice.

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