Can a casual employee access personal leave?  Until recently our default answer to this would be no in accordance with the National Employment Standards.  But this may be about to chance with the Victorian state government introducing a trial of a paid sick leave program for casual employees.  Today we will unpack how the trial will work as well as explore some of the potential outcomes for employees and businesses.

Under the NES, casual employees do not have access to paid sick leave as they are being better off overall forgoing personal leave and being paid a 25% loading.  However, the Dan Andrews Labor Government argues that not having access to paid sick leave leads to employees feeling “forced” to go to work even when they are unwell.

As a result a 2 year trial with an estimated cost of $245.6 million was introduced giving access for Victorian casual employees up to 5 sick days paid at the national minimum wage which currently sits at $20.33 per hour in March 2022.  The trial covers an estimated 150,000 workers in highly casualised industries such as:

• Hospitality Workers
• Supermarket Workers
• Retail Workers
• Aged Care & Disability Workers
• Cleaners
• Security Guards

As this state based policy will co-exist in a federal industrial relations system, the applications and payments will be facilitated by Services Victoria for the duration of the trial.

In On Demand HR’s view, this trial is very much in line with the Federal Labor government’s election policies and fundamental belief to penalise casual employers and to effectively force them to offer full time or part time employment instead.  From an On Demand HR perspective, there two key issues and concerns with this policy as follows:

Firstly, there is the double dipping consideration.  If casual employees are already being paid a significantly higher wage compared to their part time or full time counterparts on account of the 25% casual loading, should they be allowed to “double dip” and access sick leave as well?  Should this policy also consider an accompanying reduction in the casual loading?  Whilst this makes sense on the surface, we feel that this may present some legislative challenges as the casual loading is put in place by a Federal Instrument and this trial only covers Victorian employees, therefore this is unlikely.

The second major concern that we have is the indications provided on how the scheme will be funded.  As we understand it, if proven”successful”, albeit we are unsure what defines success in this case, Labor has indicated that an additional tax or levy will be introduced on businesses in order to fund the scheme.  This will have the effect of further increasing the cost to business to engage casual employees.

So the real question is, rightly or wrongly, with the increased cost of engaging casual employees as the result of the tax or levy to fund sick leave, will this lead to more employees being converted to full time or part time or simply less casual employees being engaged and for fewer hours?  Time ultimately will be the judge of this, however in our experience, many casual employees choose to remain casual employees when given the chance to covert to full or part time once they discover they will need to forgo the 25% loading and reduce their take home pay to get access to personal and other types of leave.