Major mining labour hire firm WorkPac has been hit with an estimated $84 million class action over claims it underpaid ‘regular’ casuals their annual leave and other entitlements.
Canberra law firm Adero filed legal action in the Federal Court on Monday on behalf of former WorkPac employee Matthew Peterson, who leads a suit covering almost 7000 workers and alleged underpayments totalling between $47.5 million and $84.2 million.
The class action is part of the fallout from the so-called Skene precedent last year, which allows casuals who work regular and predictable hours to claim annual leave, redundancy and sick leave on top of their casual loading.
The Skene v WorkPac precedent has widespread ramifications for any industry that employs ‘regular’ casuals, with employers estimating businesses across all industries could face an $8 billion backpay bill.
In Adero’s action, Mr Peterson was employed by WorkPac in 2014 and on-hired to BHP Mitsubishi Alliance’s Blackwater mine in central Queensland.
Despite his job offer describing him as casual for three months, Adero submitted Mr Peterson worked a six-month roster of seven 12.5 hour day shifts and seven 12.5 hour night shifts every 28 days.
He also had to submit forms to get approval about when he wanted to take unpaid leave.
About 630 former and current WorkPac employees have so far signed up to the open class action through Adero’s litigation funding agreement with Augusta Ventures.
WorkPac, which supplies mining giants BHP, Glencore and Anglo American, is banking on a test case in the full Federal Court involving former employee Robert Rossato to overturn the Skene precedent and clarify whether casuals’ loading can offset outstanding entitlements.
Industrial Relations Minister Kelly O’Dwyer has also intervened in the case and late last year issued regulations that confirmed existing law to stop casuals “double dipping”.
However, in a statement, Adero argued the Rossato case was inappropriate for the full court as it “won’t resolve the real issues on behalf of all affected workers”.
The firm argued WorkPac’s requirements for Mr Peterson to work “long form rosters and complete leave forms for approval” were “more reflective of the WorkPac business than Mr Rossato”.
“Adero have been instructed this was a standard industry practice of the WorkPac business prior to the Rossato claim being filed,” the statement said.
A WorkPac spokesman accused Adero of threatening jobs with the class action.
“By bringing this claim, Adero is advocating ‘double dipping’ by demanding businesses pay for the same entitlements twice,” he said.
“The federal government has already acknowledged the threat this poses to jobs and has introduced regulations that prevent opportunistic lawyers and their litigation funders from bringing double dipping claims such as this.”
The spokesman also disputed Adero’s assertions about the lack of value in the Rossato case as “disingenuous”.
“The Chief Justice has already acknowledged the importance of this case and granted requests for it to be heard urgently by a full bench of the Federal Court.”
Adero has also filed class actions against BHP Billiton, Hays Recruitment and Stellar over alleged underpayment of casuals.
Hays Recruitment, whose chief client is BHP Mitsubishi Alliance, is facing claims it underpaid 1500 workers since 2014 because it engaged them as casuals in breach of prohibitions against casuals in the black coal industry award.
The company said it had stopped renewing contracts for casuals because of the lawsuit.
“As a result of the uncertainty created by litigation brought against a number of recruitment firms including Hays, we are placing a temporary hold on the hiring or renewal of production and engineering casual employees in the black coal sector,” a Hays spokesman said.
“This is an unfortunate, yet prudent, practical and necessary response to the legal proceedings Hays will be vigorously defending and it is unfortunate that Hays has been forced into this response.”
The spokesman said the decision would not affect existing contractual arrangements with staff or other casuals in the sector outside of production and engineering.