A Fair Work Ombudsman, Commission and now a Court…
Prime Minister, Anthony Albanese has recently announced the Government’s intention to establish a Fair Work Court. This is following criticisms that the legal system can be complicated, costly and not timely in dealing with certain disputes. The Government is looking to remove the need for parties to commence or escalate their matter to the Federal Court of Australia or the Federal Circuit and Family Court of Australia.
The Court will be designed for use by both employers and employees on a range of workplace issues, including underpayment claims. There will be initial consultation on the design of the Court to ensure access to justice and adequate support remain key priorities.
It is also aimed at ensuring tailored employment expertise and operate simultaneously with the Fair Work Commission and Fair Work Ombudsman and other existing state industrial courts.
Recent Employment Law Cases
Case: United Workers’ Union v Allstaff Australia Sydney Pty Ltd [2026] NSWIC 39.
Underpayments – Why casual loading is unlikely to negate long service leave entitlements
A group of casual employees have been successful in obtaining a declaration for unpaid long service leave (LSL) in the Industrial Court of New South Wales.
The dispute involved 13 casual employees who provided services to Woolworths supermarkets, employed by a labour hire firm, Allstaff Australia Sydney Pty Ltd (‘Allstaff’).
The workers had each provided continuous service to Allstaff under one or more contracts for at least 10 years. When their contracts ended, the question arose as to whether they were eligible for a payment in lieu of LSL.
Allstaff contended that there was no entitlement to LSL, denying liability on several grounds. One such ground was that they had paid a 25% casual loading pursuant to the Storage Services and Wholesale Award 2020 which included their LSL entitlement – in effect, offsetting any amount owed.
A ‘casual loading’ is an additional amount added to a worker’s base rate for not receiving benefits attributed to permanent employees such as paid annual leave and personal leave.
In part, Allstaff relied on a term in the employees’ employment contracts which provided: “I understand that [the hourly rate of remuneration] will be inclusive of but not limited to annual leave or any other relevant legislative entitlements in the State or Territory for which I am employed in, unless notified otherwise.”
Decision
The Court sided with the employees that they were eligible for LSL and should be back paid an amount equivalent to that entitlement. For any offsetting to apply, there must be a close connection between the payment and the obligation to which it is applied by way of set off. Furthermore, section 7 of the LSL Act 1955 (NSW) expressly prohibited the contracting out of LSL entitlements.
Key takeaways
Casual employees may still be eligible for LSL where there is continuous service to one employer for the requisite period of time. However, as LSL legislation is state-based, this may differ in each state/territory. Both the ACT and NSW long service schemes confer an entitlement to LSL on casual employees that cannot be contracted out of. In the ACT, the casual employee must have been offered regular and systematic employment for the requisite period in order to be eligible.
It is unlikely that an offset clause in a contract can be used to satisfy an employee’s right to LSL, particularly where applicable LSL legislation provides that LSL cannot be contracted out of.
Where an employer tries to offset any loading, allowance or leave entitlement with a higher pay or loading, there must be an offset clause in the employment contract, and preferably one that specifies the entitlements being offset.
Authored by Amy Sydney & Laura Wood of MV Law
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At MV Law, Amy advises employees from all industries as well as businesses of all sizes on matters relating to the interaction between employers and their employees, from the commencement of employment right through to the end of the employment relationship and beyond.
She regularly works with employees, independent contractors, business owners, general managers, human resources managers and directors to navigate workplace issues from engagement through to compliance with the National Employment Standards, awards and enterprise agreements through to investigations and Fair Work Proceedings such as unfair dismissal and bullying and harassment claims.
Laura principally advocates in employment, contract and anti-discrimination law. She strives for practical resolutions, whether it be for the employer, employee, contractor or relevant industrial party.
In her experience to date, she typically advises on misconduct investigations, workplace disputes, negotiating contracts, exits of employment, Fair Work Commission matters, claims of discrimination and more. Her clients can be found all around Australia and overseas, varying in business size and roles. Laura brings great professionalism, creativity and empathy when navigating legal issues.