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Recent legislation was passed to introduce a statutory definition of ‘casual employee’ and to provide Courts with a statutory power to offset identifiable casual loadings against permanent leave entitlements where employees are not ‘casual’. This legislation applies retrospectively and could result in the reversal through profit and loss of existing employee entitlement provisions.


On 22 March 2021, the Federal Government passed legislation to amend the Fair Work Act 2009 (Fair Work Act) in direct response to the Full Federal Court’s decision in the WorkPac Pty Ltd vs Rossato case (WorkPac vs Rossato). Refer to 20RU-018 for more detail of the Full Federal Court’s decision. The amendments provide greater certainty for employers in relation to casual employment, including:

  • a statutory definition of ‘casual employee’
  • conversion from casual employment to permanent employment
  •  no ‘double-dipping’ for permanent entitlements.

The legislation applies retrospectively. Organisations will need to assess their casual employment arrangements against the new legislation to determine whether present or possible obligations for employee entitlements exist and therefore a provision is recognised or contingent liability disclosed. Organisations should consider obtaining legal advice to support their analysis.

ASIC included entitlements of casual employees as an other area of focus in their COVID-19 implications for financial reporting and audit: Frequently asked questions (FAQs).

If an organisation previously recognised a provision in relation to leave entitlements following the WorkPac vs Rossato judgment, the new legislation could result in its reversal through profit and loss.

If you have any questions, reach out to your usual KPMG contact.

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