A small retail business (let’s call them Sales Galore) has had a casual employee (let’s call him Johnny) for 18 months doing semi-regular hours – around 18 hours per week on average.
Over that time Johnny has been paid the 25% casual loading. For a level 1 retail worker averaging 18 hours a week that equates to about $100 per week in casual loadings. Over 18 months that adds up to around $7,000, allowing for a few weeks where they didn’t work.
Put simply, the intent of the casual loading is that they receive the extra $7,000 because they don’t receive paid annual leave, personal leave, compassionate leave etc and don’t have certainty of hours.
With the recent Fair Work ruling however, there is the chance that that same casual will be able to argue not only that they weren’t casual, but that they should now be given leave accrual on top of the casual loading.
In this example, over the 18 month period, Sales Galore would accrue an additional liability to the equivalent of 6 weeks annual leave and 3 weeks personal leave. At their hourly rate and average hours that is nearly $4,500 in liability to add to the books.
Now imagine if that employee had been the business for 6 years, the additional payments made in casual loading would have been $28,000 and the new liability would be $18,000 – multiply that over a few casuals and they are figures that would break some small business.
The message is clear – don’t leave casuals as casuals if they are more like a long-term permanent employee – consider converting them to part-time. If your business genuinely needs roles to be casuals, talk to us about how casuals need to be engaged so that they are genuine casuals.