Casual employees and leave: to disclose or not to disclose?

What’s happened since Rossato?

The landmark Workpac v Rossato case had caused significant confusion around casual employees and potential leave entitlements following a casual employee engaged by a labour hire firm to work at a mine successfully claiming leave entitlements (read more about the 20 May ruling). On 17 June 2020, Workpac Pty Ltd applied to the High Court of Australia to seeking leave to appeal the case. There has been no change in the Fair Work Act or National Employment Standards with respect to casual employees. Given this, beyond the case law casual employees do not have access to any leave entitlements apart from long service leave (subject to state legislation).

ASIC recently confirmed their key focus areas for the financial reporting season and declared that “Companies should consider whether they should provide for additional employee entitlements (including annual leave, personal and carer’s leave, compassionate leave, public holiday pay, and redundancy payments) for past and present ‘casual employees’ who were employed in circumstances covered by the Rossato decision”. They also stated their expectation that a provision or contingent liability may be required for circumstances for casual employees that were not clearly covered by the decision.

This is an unusual position given that financial statement liabilities and disclosures may be expected in current year financial reports for a case this recent and one where there has been no change to the legislation.

What does ASIC’s guidance mean for business?

ASIC expects you to take up a provision, contingent liability or other disclosure in the 2020 financial report if you fall into the category similar to Rossato or you engage casual employees who may potentially fall into the circumstances covered by Rossato. For example, mining and labour hire firms with regular casual employees very neatly fall into this category and by extension any company engaging long term or regular casuals is at risk of falling into this category regardless of whether there is any action currently taking place against you.

What does it mean for this year’s financial report?

If you currently employ casuals, or have done so in the past, it is a good idea to assess if action may be necessary in your 30 June 2020 report.

Depending on the circumstances of your casual employees, you may find yourself having to disclose a contingent liability, or even account for a provision if there is a chance you may need to pay these entitlements in the future. The chance of a future appeal does not alleviate the need for a provision or contingent liability in your 30 June 2020 financial report.

The below table outlines some potential scenarios and how they may apply to you for your 30 June 2020 financial report:

Accounting Treatment


Financial impact

Contingent liability under AASB 137 Provisions, Contingent Liabilities and Contingent Assets

A contingent liability would sometimes be necessary where there is the potential for a future payment of entitlements to casual employees but the obligation is not yet fully known or the amount cannot be reliably determined.


This may arise where:

  • Casual employees are similar but not exactly aligned with the Rossato scenario for casuals; and
  • The potential cost of payments to past and present casual employees is material.

Disclosure only. 


The disclosure should include:

  • Description of the liability
  • Details about what has caused the liability (ie the effect of the Rossato case)
  • Quantification of the potential future payments due (where possible).

Provision or accrual of employee benefits due to casuals under AASB 119 Employee Benefits

This will only be necessary where there is a known obligation to make entitlement payments to your casual employees who are impacted.


This could arise where:

  • Your casual workforce is closely aligned with that of the Rossato case meaning there is a high probability that entitlements will need to be paid
  • it has been agreed by management that the amounts will be paid; or
  • there has been successful court action against your business relating to paying entitlements to casuals.

Dr Employee costs

Cr Employee entitlements


Depending on the circumstances that arise, the amount may need to be adjusted through retained earnings or directly as an expense in the year in which the provision is made.



When calculating the potential impact, it is important to note that in the Rossato case there was no allowance for the offset of casual loadings to reduce the entitlement liability. Therefore, any contingent liabilities or employee entitlements to be included in your financial report should use the same basis.

What should I do?

If you are a reporting entity employing casuals and want to know how you should be disclosing this in your financial report, contact PKF and we will help take you through an assessment of risk.