Should I Still Employ Casual Staff In My Medical Practice?

Note:

ON 4 AUGUST 2021, THE HIGH COURT’S JUDGMENT IN THIS CASE OVERRULED THE FEDERAL COURT JUDGMENT DISCUSSED BELOW. PLEASE SEE OUR UPDATED ARTICLE ON THE CASE HERE.

There is no doubt that the recent Federal Court decision in WorkPac Pty Ltd v Rossato has certainly made business owners in Australia, including Medical Practice owners, nervous. The decision, a landmark case in terms of employment law in Australia, has been met with mixed reviews, with Unions rejoicing and employment advisors and advocates squirming. Even the Australian Government is gobsmacked!

So, what does this decision mean for your Practice, and should Practice owners still be employing casual staff? 

The Case

Workpac Pty Ltd v Rossato, concerned a mine worker Robert Rossato, who successfully argued that his previous employer WorkPac had labelled him as being a “casual” employee within their business, despite him working, regular hours and shifts that were certain, continuing and predictable in nature. Mr Rossato’s wage was duly compensated in accordance with current legislative requirements in Australia, and he was paid a 25% loading on his wage, in lieu of leave entitlements. 

The Federal Court found that Mr Rossato was in fact ‘other than a casual employee’ for the purposes of sections 86, 95 and 106 of the Fair Work Act 2009 (Cth) (FW Act), and not a casual employee of the business, after taking all factors related to his employment into consideration. This finding, entitling Mr Rossato to annual leave, compassionate leave and personal leave. 

The Consequences 

As a result of the Federal Court’s decision, millions of regular casuals could receive substantial amounts of back pay for annual leave entitlements that they did not get throughout the course of their employment. This naturally, is very concerning to businesses, as they are now potentially exposed to billions of dollars in back pay claims, with some advisors suggesting the back pay claims could be in the vicinity of $8 billion dollars in total. 

The decision has been celebrated by workers and union leaders, with the Australian Council of Trade Unions, Sally McManus, stating that the decision was a “win for all workers who are suffering because of systemic casualisation”, going on further to suggest that the decision also “clearly demonstrates the need to reduce workplace insecurity”, and discussing the need to stop the practice that some employers have adopted of labelling positions as being casual when they are in fact actually of a permanent nature. 

In contrast, the Chief Executive of the National Employer Association, AI Group’s Innes Wilcox said that the decision, highlighted the need for urgent legislative reform, particularly the Fair Work Act, in order to provide both employers and employees with certainty going forward. Wilcox referred to the recent COVID-19 pandemic as well, in stating that given the rapidly increasing levels of unemployment and underemployment currently in Australia, employers need to be encouraged to return and take on casual employees, and should not be deterred from doing so, which this decision is essentially doing. 

The Federal Government is also clearly concerned about this decision, with Attorney General Christian Porter stating that the decision would need to be pored over by the Federal Government urgently, and did not rule out the possibility of the Government assisting in an appeal. 

Who Does The Ruling Apply To? 

It is estimated that there are between 1.6 and 2.2 million casual employees in Australia, which amounts to approximately 20% of Australia’s workforce. This decision clearly has some implications for these workers, however not all of them and as much as this decision has created a level of uncertainty for all businesses who employ casual staff, it is not all doom and gloom. 

The ruling applies to casual workers who are essentially permanent employees but have been labelled casual by their employer. Casuals in name only. An example being, that a medical receptionist working the same 25 hours in your practice every week, would probably not be considered a casual employee. They are working regular, fixed, certain hours, and therefore, are in fact a permanent addition to the practice. In contrast, a medical receptionist that works only here and there in an ad hoc arrangement, 5 hours one week, zero hours the next, 20 hours the following week when relieving a sick staff member, would be considered to be a casual. 

Where To From Here? 

Given this recent decision and the reasoning behind it, it certainly doesn’t mean you should hit the panic button on your practice, for fear of being subjected to multiple back pay claims. But what it does mean is that you should be considering the nature of your practice’s relationships with its staff, and consider whether to offer part-time conversions to staff who may be not so casually employed in the practice. 

Practices should also consider consulting with their legal team, to conduct a review of their employment agreements to ensure that they are safeguarded in relation to the employment contracts of all of their staff, not just casual employees. 

Not sure if you’re employees meet the casual definition? If you need more information or want to know what you should do next, please feel free to contact the You Legal team, our team of lawyers are here to help.

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