New Fair Work Regulations – How to correctly offset the casual loading to avoid “double-dipping”

In a move spurred by the Federal Court case of WorkPacv Skene [2018] FCAFC 131, the Australian government has introduced a new regulation into the Fair Work Regulations 2009that took effect from 18 December 2018; Regulation 2.03A. WorkPac v Skene emphasised that whilst an employee’s contract of employment, modern award or enterprise agreement may regard them as a casual employee, the contextual factors of the situation as well as established common law principles concerning ‘the nature of casualness’ must also be taken into consideration. The contract of employment, modern award or enterprise agreement that applies to the employee’s employment will not be the absolute authority when determining employment status as a casual or employment other than casual. This regulation clarifies what employers can do to mitigate the risks when an employee who was employed as a casual but in practice, “during all or some of the employment period”[1],operates as an employee that is not a true casual

Regulation 2.03A applies if:

  • a person is employed as a casual employee, and;
  • that person is paid a casual loading “that is clearly identifiable as an amount paid to compensate the person for not having one or more relevant National Employment Standards (NES) entitlements during the employment period”[2],and;
  • the person must also have been employed as an“employee other than a casual employee for the purposes of the NES”[3].

If these criteria are satisfied, and the employee makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements, the employer may then make a claim to have the loading amount taken into account when determining what should be paid by the employer to the person in lieu of one or more relevant NES entitlements. The term ‘relevant NES entitlement’ refers to an entitlement in the NES that casual employees do not have, such as annual leave.

The intention behind regulation 2.03A is to avoid “double dipping” scenarios, whereby an employee could receive their casual loading during their employment period, and claim separate paid leave entitlements after the fact. For this regulation to be applicable, employers must ensure their contracts of employment or relevant enterprise agreement contain provisions outlining that casual employee(s) are receiving separately identifiable loadings and that it is clear what those loadings are being paid in lieu of. This reinforces CCI’s recommendation that employers have written contracts of employment in place with any persons they engage as employees. Please see the full regulation in Appendix A to this article.

For more information contact the CCI HR & IR experts in the Employee Relations Advice Centre on (08) 9365 7660 or email advice@cciwa.com

Appendix A

2.03A Claims to offset certain amounts

             (1)  This regulation applies if:

                    (a)  a person is employed by an employer on the basis that the person is a casual employee; and

                    (b)  the employer pays the person an amount (the loading amount) that is clearly identifiable as an amount paid to compensate the person for not having one or more relevant NES entitlements during a period (the employment period); and

                    (c)  during all or some of the employment period, the person was in fact an employee other than a casual employee for the purposes of the National Employment Standards; and

                    (d)  the person makes a claim to be paid an amount in lieu of one or more of the relevant NES entitlements.

Note1:       This regulation is intended to apply if the person has been mistakenly classified as a casual employee during all or some of the employment period.

Note2:       For the purposes of paragraph (b),examples of where it may be clearly identifiable that an amount is paid to compensate the person for not having one or more relevant NES entitlements include in correspondence, pay slips, contracts and relevant industrial instruments.

            (2)  To avoid doubt, the employer may make a claim to have the loading amount taken into account in determining any amount payable by the employer to the person in lieu of one or more relevant NES entitlements.

            (3)  This regulation does not affect the matters to which a court may otherwise have regard, at law or in equity, in determining an employer’s claim to have the loading amount taken into account.

            (4)  A reference in this regulation to a relevant NES entitlement is a reference to an entitlement under the National Employment Standards that casual employees do not have.


[1] Fair Work Regulations 2009, Regulation 2.03A(Note 1)

[2] Fair Work Regulations 2009, Regulation 2.03A(1)(b)

[3] Fair Work Regulations 2009, Regulation 2.03A(1)(c)