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 Coming to an award near you, soon. Stop the presses. The Fair Work Commission, in a full-bench decision, has determined that casual loading does not attach itself to overtime or penalties.

Why the union pursued this claim is anybody’s guess, but they did – and lost. Common sense, and now a formal decision by a full bench of the FWC has found that the 25 percent loading only applies to ordinary hours.

My logic (and that of the FB) is that the casual loading was introduced to compensate casual employees who are not entitled to paid or accrued leave entitlements. Overtime does not accrue any leave as far as I know. But let the FB provide its logic:

 “We are satisfied, having regard to the matters we are required to take into account under [the FWA], that a fair and relevant minimum safety net for casual employees…requires that casual employees receive the benefit of overtime penalty rates. On the basis of the factual conclusion we have set out, it is apparent that casual employees who work long hours in the course of a day or a week are subject to significant disabilities. Those disabilities are essentially the same as those applying to permanent employees who work lengthy hours and receive overtime penalty rates for doing so. We see no good reason for the different treatment of casual employees, nor was any convincing rationale for this advanced by any interested employer party…”

Commentary

With all the controversy over casual employees, ensure that your letters of offer and contracts of employment contain words to the effect:

“The casual loading is paid as compensation for annual leave, unpaid personal/carer’s leave, notice of termination, redundancy benefits and the other entitlements of full-time or part-time employment. Casual loading applies to normal hours only (ie not overtime)”.