Casual ruling will close businesses: poll

Almost a quarter of Australian businesses say a recent Court decision will deter them from hiring casuals… and retail will be among the hardest-hit sectors

A special Roy Morgan SMS survey of 881 Australian businesses show that more than a third – 34.5% – will be affected by a recent Federal Court ruling on the entitlements of casual employees.

The May 2020 decision in the matter of WorkPac v Rossato upheld a principle that work which is regular, ongoing and permanent is not genuinely casual.

Mr Rossato, a truck driver at two Queensland sites, claimed outstanding entitlements such as annual leave and public holiday pay, and the Court determined his work was permanent rather than casual, meaning he was entitled to payment for such leave.

The decision is expected to impact a number of sectors, including pharmacy; Roy Morgan says that the agriculture, retail, manufacturing, transport and postal, and wholesale sectors are likely to be the most affected.

A quarter of businesses, 567,000 (24.5%), say the ruling will ‘Deter them from hiring casual employees’, over one in 10 businesses, 245,000 (10.5%) say the ruling will have a ‘large financial impact’.

As many as 123,000 (5.5%) businesses say they will be ‘forced to close’ because of the ruling. Businesses were able to provide multiple responses to the survey question.

Respondents to the survey were asked: “The Federal Court recently decided that some casual workers, which it held were permanent employees, are entitled to payment of holiday pay and sick pay, in addition to their casual loading, for all time worked during the past six years. How will that decision affect your business?”

Respondents who answered the first question were then asked: “And why do you say that?”

The results showed that small and medium sized businesses, with between five and 199 employees, will be most affected.

A majority of small businesses (54.5%) with five to 19 employees and medium businesses (54.5%) with 20 to 199 employees say they will be affected by the ruling in some way.

Over a third of large businesses (36%) with 200 or more employees and just under a third of micro businesses (32%) with one to five employees say they will be affected by the ruling in some way.

As for the retail sector, 47% said they would be affected.

Roy Morgan CEO Michele Levine said the Federal Court’s ruling on casual employees has the potential to have a significant impact on hundreds of thousands of Australian businesses.

“The biggest direct impact forecast by around a quarter of businesses is that they will be deterred from hiring casual employees in future. Many businesses mentioned ‘double-dipping’ and the fact that ‘casual workers already get a 25% loading for sick pay and annual leave etc’,” Ms Levine said.

“In addition as many as 123,000 businesses say they will be ‘forced to close’ because of the ruling as they have a significant reliance on casual employees.

“This reluctance to hire casual employees because of the increase in costs and uncertainty surrounding how these workers will be considered in the future is a troubling development in an economy which has just experienced over a million job losses due to the COVID-19 pandemic. 

“Prime Minister Scott Morrison has already flagged working together with unions and the business community to re-boot the Australian economy in the aftermath of the COVID-19 pandemic but this impetus must really be driven by business and union leaders if it’s to truly have a chance of success.”

At the time of the decision, Industrial Relations Minister reportedly said the Government could consider legislation to counter the decision, or that WorkPac could appeal it.

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