Labour Hire class action

Early in 2019, Law Firm Adero Law filed a class action lawsuit against (labour hire company) WorkPac claiming unpaid entitlements stemming from the “misclassification of workers” that had been placed at multiple mining sites.  

Context  

This class action comes in the wake of the WorkPac v Rossato case (here is our article series if you need to refresh your memory) which exposed significant liability for employers (and labour hire firms) regarding the misclassification of casual workers.  

Particular focus of the legal action fell on false classification of workers as ‘casual’ and by extension, unpaid entitlements that these ‘casual’ worker were therefore entitled to and are now claiming such as paid annual leave and compassionate leave etc.  

New legislation limiting claims value

In partial response to WorkPac v Rossato, recent legislation passed by Federal Parliament (amending the Fair Work Act) clarified this contentious area of law, by providing a clear definition of ‘casual work’ as well as retrospectively limiting what claims can be made against employers (also known as the ‘double dipping’ dilemma).  

The law restricts wrongly classified ‘casual’ employers from ‘double dipping’ and claiming unpaid entitlements whilst retaining the casual loading they were paid under their ‘casual’ employment arrangements. Now any claims for unpaid entitlements can be offset against the casual loading that the employee had been paid under the previous “casual” arrangement, thus reducing the figure. 

(If you are unfamiliar with the new legislation regarding casual employees feel free to check out our article outlining some of the major changes.) 

What’s next? 

The saga is far from over, the constitutional validity of the retrospective operation of the new laws may be challenged in the High Court in the future.  

Nevertheless, this remains an area of law where developments will be both closely followed and closely scrutinised. Moreover, it is needless to say, compliance with employer obligations is under the spotlight right now.